Leaders of parliamentary blocs welcomed the government’s economic rescue plan at a meeting in Baabda Palace Wednesday, but the absence of several key leaders cast a shadow on the gathering.
According to the final statement from the meeting chaired by President Michel Aoun, those gathered in Baabda considered the plan to be a general framework consisting of several components that focus on restructuring the public debt and the banking sector, and reform in public finances with a plan in parallel to stimulate the economy and its productive sectors.
Aoun had called for the meeting at Baabda Palace to discuss the government’s economic rescue plan, extending an invitation to heads of parliamentary blocs.
Those present at the meeting reaffirmed that “a plan of action is necessary to regain confidence on all levels,” that includes issuing new laws, executive decisions, adopt structural reforms in addition to a plan that tackles the cost of living and inflation.
They also called on the international community to stand by Lebanon while it endures crises that have accumulated.
Lebanese Forces leader that is part of the government opposition, Samir Geagea, expressed his disapproval of the plan to reporters after the meeting.
“Nothing indicates that this government is any different from its predecessors,” he said, adding that he presented his comments during the meeting.
At the start of the session Aoun called for unity among Lebanese to face the “existential” threat facing their country.
“The rescue that we are aiming for is not the responsibility of one side, or one political side. … Getting out of this dark tunnel that we are passing through is the responsibility of all,” Aoun said at the start of the meeting.
The government’s plan was not studied with a political mindset but an economic one, he added.
“I call for approaching the plan from that respect,” he said.
Aoun added that the government’s plan sought to correct structural imbalances in the economy, secure social safety nets, aid to those most in need and restore confidence in Lebanon.
“In addition to the external financial support that is required, the success of the government’s plan … requires national unity and deep awareness on what threatens our existence and being as well as the identity of Lebanon,” Aoun said.
For his part, Prime Minister Hassan Diab called for a national partnership on the rescue plan without any prejudice, adding that the plan was subject to development.
“We present the plan before you today because it is not the property of the government,” Diab added, appealing to all political forces and parties as well as banks to stop arguments.
During his address to the heads of parliamentary blocs and parties, Diab said there was no room for rehashing the past and exchanging blame because it would be costly for everyone.
“This plan is an opportunity to negotiate with creditors and for dialogue with the International Monetary Fund,” he said.
Diab pointed out that although the country had been at a critical crossroads when the coronavirus pandemic struck, the government was able to succeed in the challenge with its limited capabilities.
“The Lebanese people have the right to worry about the country’s future and theirs,” he said adding that time was of the essence and the accumulated losses were great.
Addressing the meeting, Finance Minister Ghazi Wazni said Lebanon had started negotiations two weeks ago to restructure its sovereign debt, and opening negotiations with the International Monetary Fund would restore confidence in the country.
Wazni said the plan, which stretched over a five-year span during which Lebanon would need $28 billion, aimed to protect depositors’ money.
“The reform plan is transparent and for the first time presents clear numbers on the accumulated losses and aims to restore confidence and increase growth.” Wazni said.
Liberalization of the exchange rate before restoring confidence and obtaining support from the IMF and donor countries would lead to a significant deterioration of the exchange rate, he said.
Which is why, Wazni added, the state was “forced at the current stage to continue to determine the exchange rate, but in the next stage will adopt a flexible one.”
Wazni also presented the idea to ask banks to sell offshore assets and bring back the proceeds, among other options from the plan.
“The accumulated losses at the Central Bank stand at about $63 billion,” he said, explaining that it was a result of the sovereign debt and deficits caused by the electricity sector.
“Restructuring the public debt is one of the main conditions that must be implemented in the upcoming months,” Wazni said.
The Baabda all-party talks are designed to rally political support for the government’s economic rescue plan, which has already been criticized by MPs from various blocs, and came under fire by the Association of Banks in Lebanon and the country’s private sector.
The meeting, chaired by Aoun, was attended by Parliament Speaker and head of the Amal Movement Nabih Berri, head of the Free Patriotic Movement MP Gebran Bassil, head of the Hezbollah bloc MP Mohammad Raad, head of the Consultative Gathering bloc MP Faisal Karami, head of the Lebanese Democratic Party bloc MP Talal Arslan, head of the Tashnag Party bloc MP Hagop Pakradounian, head of the Syrian Socialist Nationalist Party bloc MP Assaad Hardan and head of the Lebanese Forces Samir Geagea, who hadn’t announced earlier if he would personally attend, in addition to Diab, Wazni, Economy Minister Raoul Nehme and advisers.
Five Parliamentary blocs who have boycotted the meeting did not have representatives present. Former Prime Minister Saad Hariri’s Future Movement bloc, Progressive Socialist Party’s bloc, former Prime Minister Najib Mikati’s bloc, Kataeb Party’s bloc and Marada Movement head Sleiman Frangieh’s bloc – that has ministers in the current government – were all absent.
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