France informed Lebanon yesterday that there is no alternative to implementing a program under the supervision of the International Monetary Fund to get out of its current severe crisis, and that Beirut must implement urgent reforms in order to win international support.
"Help us to help you is the message on my visit," said French Foreign Minister Jean-Yves Le Drian, after meeting with Lebanese leaders in Beirut, adding that Paris was ready to mobilize support, but this must be preceded by concrete action in terms of reform.
The financial crisis, resulting from decades of corruption and waste, represents the greatest threat to Lebanon’s stability since the civil war that took place from 1975 to 1990. The collapse of the lira has exacerbated inflation and poverty, and the Lebanese have been unable to withdraw their savings freely in a faltering banking system.
France led international efforts to push Lebanon into reforms, and hosted a donors' meeting in 2018, during which they promised to provide more than $ 11 billion in investment in infrastructure, provided the reforms are implemented.
In May, Lebanon started talks with the International Monetary Fund, but it stopped in the absence of reforms, and with the emergence of disputes between the government, the banking sector, and politicians over the size of the huge financial losses in the banking system.
Reforming the state-owned electricity network is one of the many areas that donors want to see progress on, as it drains up to two billion dollars annually in public funds, while it does not meet the country's electricity needs.
Le Drian said that what has been achieved so far in the electricity sector is not encouraging.
Lebanon, burdened with one of the world's largest public debt burdens, defaulted on its sovereign debt in foreign currencies in March, indicating very low foreign reserves. The Lebanese pound has lost about 80% of its value since October.
Le Drian also said that it is necessary for Lebanon to respect the policy of distance from conflicts in the region. After his arrival, Le Drian met with President Michel Aoun and Prime Minister Hassan Diab. Government sources said that Diab informed him that Lebanon had accomplished a number of reforms, and set a time frame for implementing further reforms.
Government sources said that Diab also told Le Drian that the authorities had adopted an audit at the Central Bank of Lebanon, to uncover the financial gap and its causes, and pave the way for a possible audit in other institutions.