Expectation in Lebanon for the tendency of “written amendments” to the IMF agreement

Parliamentary entry through the portal of the Finance and Budget Committee on the line of the “Memorandum of Financial and Economic Policy” attached to the recovery plan approved by the government, the expected qualitative shift in the dynamics of the transition in the Lebanese file with the International Monetary Fund devoted from the formula of the initial agreement concluded and suspended in a waiting station with an unspecified time, to the stimulation of the push towards a final agreement that enjoys broad national consensus, and in a manner that the revival of aspirations ensures for the possibility of submitting it within a period of two months, for approval by the fund’s senior management.

This transformation, which Al-Rai had previously outlined before the participation of Prime Minister Najib Mikati and his economic team in the Finance Committee’s meetings last Thursday, requires accelerating the adoption of the current year’s budget bill, not just from the entrance. to the first conditions of the Fund, but with the aim of creating a fraction Real in restructuring the lists of expenditure and imports in treasury accounts, to enable the government to meet some of the claims of to meet the public sector, which still carries. a strike out due to the sharp contraction in salaries in exchange for exorbitant inflation rates that exceeded one thousand percent, and still flies at monthly averages close to an average of 10 percent per month on the cumulative index.

Tunisian General Labor Union

At the heart of the new dynamic, according to concerned financial sources, is the commitment of the Prime Minister and his ministerial and advisory team to expedite the inclusion of “written text and proposals”, according to what he made during the committee meeting and his explanatory answers to deputies’ questions and concerns. This is because the “oral” amendments were considered by the deputies as a new plan, especially in terms of compliance with the rule of division of losses according to responsibilities, and a proposal to establish a multi-source recovery fund. in order to contribute to return part of the bank deposits exceeding the specified line of protection in the amount of $ 100,000 per bank account. .

According to the head of the Parliamentary Finance and Budget Committee, Ibrahim Kanaan, there are “changes, developments and essentials that are being worked on, including the establishment of a fund and work on deposits.” The MPs’ unanimous position is that the rights of depositors are guaranteed in the constitution and must be ensured by a fair distribution of losses in the recovery plan that has not yet been referred to Parliament. The Ministry of Finance was also asked to prepare within days a study related to the determination of the exchange rate and the extent of its impact on the citizen to approve the budget, which includes a multitude of exchange rates.

And it seemed that the financial sector was not immune to the burgeoning atmosphere, with evidence of the immediate correction to the withdrawal of the contents of a book directed by an adviser to the Association of Banks to the Fund’s mission entrusted with the Lebanese file, so that the association would return and issue an official statement to the contrary, in which “the Association of Banks in Lebanon is interested in explaining that it is not the agreement between the Lebanese state and the International Monetary Fund absolutely oppose, especially as it believes that agreement to be one of the most important solutions to emerge from the current crisis, but at the same time the association emphasizes that any solution carries the hierarchy of responsibilities and the relationship of losses must be reconciled so that the banking sector and all depositors are not charged The losses that the public sector has caused over the years, and that efforts must be combined to look for solutions that are currently available to bridge the financial gap by retaining deposits and not writing them off. ”

In line with the positive trends ahead of Mikati’s interventions in the House of Representatives, the Board of Directors of the Association of Banks reiterated its view that it is necessary to reach an agreement with the International Monetary Fund, as this is the best way is to restructure and rehabilitate the economy by approving and implementing the necessary reforms. He also stressed that “the division of responsibilities must be done in a fair and lawful manner that protects the funds of all depositors in the first place. This is because the state that spent the money has enough future resources to cover its responsibilities, through a structure that preserves state assets, improves its management and increases its returns in a way that contributes to resolving the depositors’ crisis. and contributes well to the public, and is a realistic and constructive step in the path of reform.

The documented financial statements disclosed by the Governor of the Banque du Liban, Riad Salameh, are also of particular importance in reconsidering the rule of division of responsibilities and losses, contrary to what the government’s previous orientations ascribed. has to lift the largest burden of the financial gap burdens on depositors in banks and their capital by “writing off” 60 billion USD Of the investments of banks with the Central Bank, amounting to about 80 billion USD.

These data showed that the state consumed the equivalent of these amounts during the period from 2010 to 2021, as the energy sector spent about $ 24.5 billion in cash, and the public sector spent about $ 8.3 billion, and imports of subsidized materials was financed at a cost of about $ 7.6 billion, in addition to The losses suffered by the Banque du Liban from financing of Eurobonds, amounting to about $ 7.4 billion, in addition to the interest costs on these funds, which are approximately $ 15 billion. So the state, by law and within 10 years, spent about $ 62.7 billion.

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