The International Monetary Fund delegation visiting Lebanon continued its tour of officials, and met yesterday with the Board of Directors of the Association of Banks in Lebanon, and the proposed rescue plan was discussed, including the restructuring of the banking sector, according to a statement by the Association.
The information available to “An-Nahar” indicates that the negotiations will continue until the initial signing of a memorandum of understanding between the government and the IMF outlining the principles and criteria of the economic recovery plan on the basis of which the Fund will support Lebanon. In advance, awaiting the course of negotiations. Concerned sources confirmed that the available data on the negotiations suggest positives that the head of the International Monetary Fund mission had previously emphasized at the beginning of the mission’s tour to the officials.
In this context, the economic and financial advisor to the Prime Minister, MP Nicolas Nahas, announced yesterday that “the path of negotiations with the International Monetary Fund is proceeding in the right way,” adding that “Lebanon has no choice but to move towards the required reforms.” He said: “The reform basket will be following the elections, and depending on what these elections will produce, either it will be renewed for the current class, or we will see a difference in the scene, and here the hope for reform may be greater.” He explained that “the Capital Control Law does not address the outstanding financial problem, but rather its goal is to limit the outflow of existing funds and not new funds, and it has nothing to do with deposits and people’s money, nor with structuring the banking sector that the recovery plan is concerned with, but rather by building a new economic system that works to attract funds to improve Economy”.
Government sources told Al-Diyar yesterday that the International Monetary Fund mission, consisting of experts and specialists, is conducting a detailed technical research with the concerned Lebanese authorities in the public and private sectors, following its meetings with the Presidents of the Republic, Parliament and the government.
She said that in this round, it is hoped that a preliminary or initial agreement will be reached between Lebanon and the IMF at the conclusion of the two-week mission of the aforementioned mission, and it is known that the new round began at the beginning of this week.
In response to a question, the sources said that the initial or preliminary agreement expected to be signed opens the door to a new stage in order to reach a final and detailed agreement that will take time, and which is expected to be following the date of the parliamentary elections.
The sources revealed the details of the progress made in the negotiations between the IMF and the Lebanese side headed by Deputy Prime Minister Saadeh Al-Shami, noting that the Fund’s mission expressed to the three presidents its satisfaction with the performance and cooperation of the delegation to the Lebanese and what has been reached so far.
In the information available to Al-Diyar from sources, officials in the IMF and the Lebanese side reached many points of convergence in the vision regarding the financial and economic recovery plan, and the following steps were emphasized:
1- Approval of the Capital Control Law, where the Fund delegation expressed its satisfaction with the approval of the Council of Ministers in its last session, the draft law that takes into account most of the Fund’s observations.
2- Reorganizing the Banque du Liban, as the delegation stressed that all the bank’s bodies should be independent and not be affiliated with the bank’s governor, including: the Banking Control Commission, the Special Investigation Commission, and the financial market authorities. The required amendment also includes the monetary and credit law and its governance more broadly.
3- Restructuring the banking system in the context of addressing the banking situation in Lebanon.
4- Amending the Banking Secrecy Law.
5- Activating the Anti-Corruption Commission and issuing its regulatory decrees as soon as possible.
The sources made it clear that there is a basic point that has not been resolved yet, along with some other points, which is the assessment of losses and financial losses that led and lead to the economic and financial collapse taking place.
Nidaa Al-Watan wrote: The agreement of intent that the government announces the possibility of signing with the International Monetary Fund before the parliamentary elections requires it, according to the head of the Lebanese Economic Association, Dr. Munir Rashid to carry out PRIOR ACTION, and to have all the reforms ready in detail, and the budget for 2022 is present. The International Monetary Fund then reviews them and sets performance indicators for them. In this way, the International Monetary Fund’s modus operandi can be shortened in the context of signing financing agreements with countries. The confusion that occurred, of which the IMF staff bears part, was the mission’s suggestion to the Lebanese officials that an agreement might be reached in the event of the approval of “Capital Control”, from Rashid’s point of view. “Knowing that the capital restriction law is one of the prior procedures that the Fund requests to implement. Before it, there is the unification of the exchange rate, and the existence of a comprehensive budget that does not exclude, for example, electricity financing and debt service, with acceptable deficit rates.”
According to the electronic “al-anba” information, the fund’s delegation expressed positive attitudes regarding some of the proposals that were presented, but it is still calling for more. He also made observations on the Capital Control project, but he considered it better than the previous one. The fund’s sources, through the electronic “alanba”, consider that there are positive points that, if they continue, can lead to understanding and signing the agreement.