Lebanon announces progress in understanding with IMF negotiations

Beirut, November 13 (KUNA) -- Lebanese Finance Minister Yassin Jaber announced on Friday that talks with the International Monetary Fund (IMF) mission have made progress in narrowing differences among the various parties, amid discussions characterized by frankness and mutual understanding. He said efforts are focused on addressing the banking crisis that has persisted for seven years.

In a statement at the conclusion of four-day negotiation sessions centered on a draft law addressing the fiscal gap, the status of banks, and the repayment of depositors’ funds, Jaber said an agreement had been reached “to form a small committee to follow up on meetings, with the aim of finalizing the required formulations before the end of the year and presenting a unified version to the Lebanese Parliament to facilitate the approval of the fiscal gap law.” He expressed hope that a ready-to-implement law would be completed before March next year.

Expressing his expectation of making progress that would enable reaching and signing an agreement with the IMF during the first quarter of next year, Jaber said regarding the repayment of deposits that “details are still under work, and the approach is based on two main objectives: restoring banking operations to support economic development and strengthen confidence in banks, and beginning the repayment of depositors’ funds.”

He clarified that “an overwhelming majority of depositors, reaching about 90 percent, will be able to obtain their funds in cash or in US dollars during the first phase, while the treatment of the remaining deposits will involve bonds issued by the Central Bank of Lebanon, to be settled in subsequent stages.”

On the distribution of losses, Jaber reiterated the hierarchy he had previously announced, stating, “The state bears the burden first, then the Central Bank of Lebanon, then the banks, and finally the depositors.” He emphasized that most depositors will recover their full funds, albeit with different deadlines and repayment mechanisms, but “paying all funds to all depositors at once is not possible given what Lebanon has experienced.”

For his part, Lebanese Minister of Economy and Trade Amr al-Sabbagh confirmed that progress had been made and that there was agreement in principle, paving the way to discuss the necessary technical details to complete the treatment. He said the small committee would complete these details in parallel with providing the required data to the IMF, aiming to finalize the details before the end of the year and complete the legislative formulation for submission to Parliament.

Al-Sabbagh said the committee includes “three parties: the government, represented by its experts and with the participation of relevant ministers as needed; the Central Bank of Lebanon, represented by its governor and his team; and the International Monetary Fund.”

The four-day negotiation sessions, centered on the draft law addressing the fiscal gap, the status of banks, and the repayment of depositors’ funds, were attended by IMF Mission Chief Ernesto Rigo and the Lebanese negotiating delegation, headed by Finance Minister Yassin Jaber and including Economy and Trade Minister Amr al-Sabbagh, Central Bank of Lebanon Governor Riad Salameh, and representatives of the presidency and the government, along with specialized experts. (End) A.Y.B./R.J.