A Lebanese official revealed some of what the International Monetary Fund requested from his government before approving a cooperation program.
The Deputy Prime Minister of Lebanon, His Excellency Al-Shami, revealed that the Fund requested an amendment to the law on lifting banking secrecy, to combat corruption and tax evasion, and to have access to the names of the concerned account holders, and according to the Fund, it would facilitate the process of restructuring banks.
Al-Shamy announced that “the government will approve the recovery plan before the parliamentary elections scheduled for May 15.”
Al-Shami said in a television interview, “We will send all the bills required from the IMF to the House of Representatives, and the Capital Control and 2022 budget may be approved in the House before the elections. As for the bank restructuring project, it may be postponed a little because it will take some time.”
He added, losses are estimated at regarding $73 billion, but this number may change following examining the banks, and an international institution selected by the Bank of Lebanon and the Banking Control Commission will evaluate 14 Lebanese banks, which constitute 83 percent of the banking sector, to arrive at accurate numbers.
He added: “The state will bear part of the losses within a specific ceiling and restrictions, in addition to the Banque du Liban and the banks, and we will protect 90% of small depositors, and one of the propositions for large depositors is the bail in, which does not mean the loss of deposits.”
He continued, “The research includes converting part of the dollar deposits into Lebanese pounds and finding a sovereign fund to compensate people in the future.”
He continued: “The IMF tends to charge banks more than depositors in terms of percentage and our appreciation for the exchange rate is its liberalization and unification, provided that the market determines the exchange rate within controls and margins.”
Al-Shami said that “the situation will worsen if the corrective program is not implemented following the parliamentary elections, and the cost of waiting is very high.”
The International Fund announced that it had reached an agreement with Lebanon at the staff level on economic policies, in order to facilitate funding from the Fund for a period of four years.
According to a statement issued by the Fund, the Lebanese authorities, with the support of IMF experts, formulated a comprehensive economic reform program aimed at rebuilding the economy, restoring financial sustainability, enhancing governance and transparency, removing obstacles to job growth, and increasing social spending and reconstruction.
The statement added: “The agreed program is subject to the management of the International Monetary Fund and the approval of the Executive Board, and the Lebanese authorities have agreed to carry out many important matters and reforms before the meeting of the Board of Directors of the International Monetary Fund.”
The IMF program for Lebanon may be supported by a 46-month financing agreement with access to the $3 billion requested.
He continued, “Funding support on highly concessional terms from Lebanon’s international partners will also be necessary to support the authorities’ efforts and ensure that the program is adequately funded and can achieve its objectives.”
