The complex relations between the executive, legislative and economic bodies could complicate the negotiation process with the International Monetary Fund, observers say, while a delegation from the international institution met the President of the Republic, the General Michel Aoun.
The head of state estimated, during this meeting, that the IMF will be in permanent contact with Lebanese officials, “to reach a consensus on the terms of the reform plan which will gradually make it possible to achieve the promised economic recovery” . It will also involve granting the necessary priorities to social and health issues, combating poverty and reforming the country’s infrastructure, such as electricity, communications and the rehabilitation of the port of Beirut, as well as the implementation of hydraulic, industrial and agricultural projects. General Aoun noted that the forensic audit of the Banque du Liban accounts is currently continuing while the president of the chamber would have sabotaged the parliamentary session which should have decided on the one-year extension of the lifting of bank secrecy.
On the IMF side, its officials expressed their willingness to help Lebanon, stressing that the program to be put in place “requires concerted efforts by all governments and parties and a consensus between them to support the economic plan.”
For its part, while negotiations with the IMF should soon be relaunched, sources close to it express their concerns noting that the parliament adopted a text related to capital controls after 2 years. This delay, considered important, gives rise to fears that the projects discussed with the IMF may require lengthy negotiations with parliament. In addition, the text would also be incompatible with the rescue plan currently prepared with the IMF, demonstrating the lack of coordination between economic needs, government and parliament.
Questions also relate to the question of the distribution of losses in the banking sector, the authorities having decided not only to undermine the rights of depositors but also to limit the losses of the banks themselves, resulting in the state bearing the majority of the losses which could reach a minimum of 55 billion dollars according to sources close to the cabinet. Worse, the IMF considers that these figures are unrealistic, estimating that the losses of the banking sector are more important on the one hand and on the other hand, that the state cannot assume currently nor in the distant future the scale of the losses. are to be committed. The Mikati III government will therefore not be able to meet its commitments to depositors unless it holds the private banking sector responsible to cover a large part of the losses.