France called on Lebanon on Friday May 1 to implement without delay a series of reforms in order to benefit from international financial aid, which would support its economic recovery plan adopted on Thursday.

"The Lebanese government has adopted an economic plan and decided to request an IMF program. These are important decisions to find a solution to the major crisis facing the country," said the spokeswoman for the French Ministry of Foreign Affairs in a statement.

"It is now urgent that the reforms essential for the country's recovery be implemented and thus make it possible to meet the legitimate aspirations of the Lebanese people," added Agnes von der Mühll.

"It is on this basis that France stands ready to support the efforts of Lebanon, in conjunction with its partners," said the spokesperson for French diplomacy.

The economic plan is only a "prerequisite", noted a French diplomatic source, pointing to the necessary restructuring of the debt to improve the conditions for financing the Lebanese economy.

Beyond that, several reforms are necessary concerning the fight against corruption, the independence of the judiciary, the rules of public procurement or the regulation of key sectors such as electricity, she added.  

Financial assistance requested from the IMF

The Lebanese government adopted a stimulus plan on Thursday to try to get the country out of a serious crisis marked by rampant inflation and a sharp depreciation of the Lebanese pound against the dollar. 

Another step was taken on Friday as the government initialed an official request to the International Monetary Fund (IMF) to request financial assistance.

If the authorities have not expressed themselves on the expected amount of the IMF nor on the terms of this aid, the government hopes that this plan will be considered sufficiently credible by the international community to guarantee it crucial aid of more than 20 billion dollars, or 18 billion euros.

Unconvinced banks

However, this plan to rescue the Lebanese economy was severely criticized on Friday by the country's banks, which accused it of "further destroying confidence".

This rejection could complicate discussions with the IMF because banks are among the main creditors of the Lebanese state.

The plan released on Thursday could force shareholders and major bank depositors to bail them out to wipe out some $ 70 billion in losses and it paves the way for austerity measures to end the crisis that precipitated the fall of the Lebanese pound, soaring unemployment, social unrest and a default by Beirut on its sovereign debt.

A source close to the banking sector said that the IMF should consult the banks on the project before making a decision and added that the banking sector would present an alternative plan to the government in the next two weeks.

In Lebanon, the economic crisis had been one of the triggers in October 2019 of an unprecedented uprising against the political class, unchanged for decades and accused of corruption and incompetence. Despite the restrictions imposed on the new coronavirus, popular mobilization against power has resumed in recent days.

With AFP and Reuters

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