The granting of a loan of $ 3 billion is conditioned on the implementation of reforms.
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The announcement of an agreement in principle between the International Monetary Fund (IMF) and Lebanon, Thursday, April 7, first concrete advance in two years towards the unlocking of a help plan, was welcomed with satisfaction in the country of cedar and his foreign sponsors. It has also raised a lot of skepticism in those who doubt the ability of the leaders to implement the reforms left to date unresolved, and condition the signing of a final agreement. “It’s a very important step and a first step, but a lot of work awaits us, given the complicated problems, faced by Lebanon,” says Saadé Chami, the Chief Negotiator and Deputy Prime Minister Lebanese, the one of the main craftsmen of this agreement.
At the key, there is the promise of $ 3 billion (2.8 billion euros) over four years under the IMF’s expanded credit mechanism. This help is now considered the only way out at one of the worst crises in the history of Lebanon, which saw the national currency lose 90% of its value, and 80% of the population sink into poverty. She was also, “said Prime Minister, Najib Mikati,” a visa for donor countries to start cooperating with Lebanon and put it back on the world finance menu “. With, on the horizon, the possible allowance of the $ 11 billion of loans and donations promised to the Economic Conference for the Development of Lebanon by reforms and with companies (Cedre), in Paris in 2018 – an amount that n ‘has never been disbursed, lack of credible reforms on Lebanese side.
Nothing is acquired. The aid plan must, beforehand, receive the approval of the IMF management and its board of directors. To this end, the Lebanese part is committed to honoring a series of conditions. First of all, there is the vote of budget legislation 2022, capital control, banking secrecy and bank resolution. The government must also unify exchange rates and adopt a floating exchange rate against the dollar. It must develop a budget strategy as well as the restructuring strategies of the banking sector and the external public debt. Finally, reforms are expected on taxation, pensions or energy.
“The question of political acceptability”
The calendar is tight. On May 15 must be held the legislative elections, after which the government will no longer manage that current affairs until the nomination of a new firm, generally source of long political negotiations. “There are conditions that can be completed before the elections, others for which it will take more time. We will try at least to transfer all the documents to Parliament, so that the new room can vote them”, explains Mr. Chami.
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