Signals for the final abandonment of the option to “delete” deposits

Ali Zainuddin wrote in “Al -Sharq Al -Awsat”:

A mission from the International Monetary Fund in Lebanon, this week, is carried out a round of facts and polls, a first step to open the dialogue channel and communicate with the new presidential era and its government, and within a renewed task, in form and content, from direct negotiations aimed at helping to reach a comprehensive economic reform program.

This move acquires exceptional importance, depending on the reform pledges committed by the President of the Republic, Joseph Aoun, in the department’s speech and the following statements, which are reinforced with matching obligations mentioned in a statement of confidence to the government, and subsequent assurances by its president, Nawaf Salam, and the concerned ministers. While the Fund’s general manager, Crystalina Gorgieva, the Acting Governor of the Central Bank, Wassim Mansouri, informed her of the completion of the completion of the contract of constitutional institutions, the commitment of rescue and reform and her desire to visit Lebanon soon.

New negotiating tour
It is learned that the research between the two teams will lead to determining close dates to launch new rounds of direct negotiations, and in particular the appointment of the negotiating Lebanese team, which is likely to be headed by Deputy Prime Minister Tariq Mitri, in exchange for his position and the experiences he possesses in international relations, and includes Minister of Finance Yassin Jaber, Minister of Economy Amer Al -Bassat, and the ruler of the Central Bank on behalf of the appointment of the authentic. As well as participation of a coordinated and consulting nature of the private sector and banks.

It appears, according to a financial official, that reaching the conclusion of the conclusion of a final agreement between the two parties and it is noted that a qualitative increase in the financing package specified by about 3 billion dollars will not take more than a few months, and perhaps before next summer, in light of cross information about the significant progress of the mission previously, ensuring that options lacking justice in the distribution of the achieved losses, especially the need to reconsider the proposal of the “deletion” of the largest part of the part of The employment of banks of about 80 billion dollars at the central bank, in an effort to contain the financial gap of about 72 billion dollars.

The previous government failed to conclude a final agreement with the fund’s administration, after it succeeded in April 2022, in signing a framework agreement at the level of experts on economic policies in order to facilitate funding from the fund for a period of 4 years, at a value of $ 3 billion. Where the “Facilitated Fund” stipulated a package of legislative and executive measures within the strategy of reform and the restoration of financial growth and sustainability, enhancing governance and transparency, and increasing social spending and spending on reconstruction. In addition to restructuring the external public debt that will lead to sufficient participation of creditors to restore the debt to sustainable limits and fill the financing gaps.

A modified plan for recovery
And with a monitoring of a shift in the response of the International Foundation to presidential and governmental directions not to proceed with any suggestions that lead to the loading of depositors, the largest ministers of the weight of the achieved gap, and the construction and economic cost added to it as a result of the Israeli war on Lebanon, and requires spending about 11 billion dollars, according to the World Bank’s surveys, an understanding of an understanding between the two parties to prepare a modified rescue plan to recover and restructure the sector is expected Financial, includes defining various mechanisms for gradient payment of outstanding rights, building a different formal methodology in distributing losses in accordance with the gradients of responsibilities, verifying the legitimacy and sources of funds, auditing the state financing files, consumer support and reaping profits by fulfilling loans at a low exchange rate and “banking” cut operations.

In parallel, he learned that the mission would be the satisfaction of the fund’s management to the government’s speed in the first month to hand over its duties by setting announced foundations and legal and executive measures for structural reforms that include addressing public debt, financial stumbling, the independence of the judiciary and the issuance of applied decrees to implement pending laws and the commitment to appoint bodies organized in vital sectors such as electricity, aviation and communications. Likewise, in terms of monitoring encouraging factors related to changes in Syria, attempting to control the borders, combating smuggling, besieging the drug scourge from its sources, factories, and trafficking in its border materials.

The Fund’s administration previously acknowledged that Lebanon has made some progress in monetary and financial reforms, through the measures taken by the Ministry of Finance and the Central Bank of Lebanon that aimed at containing the deterioration of the exchange rate, the stability of the monetary supply and the reduction of inflationary pressures, and in a manner that includes strictness in fiscal policy, the gradual cancellation of cash financing of the budget, the cancellation of a banking platform, and the continuous steps towards unifying prices Drainage, improving revenue filling from value -added tax and customs duties.

On the other hand, you notice that the progress made in other basic reforms, including governance, transparency and accountability, is still limited. While the Bank of Lebanon has started taking steps to enhance internal control and governance, there is an urgent need to take measures to increase transparency in the public sector, including the audited financial statements of public institutions, as well as public institutions reforms on a wider scale. Moreover, the weaknesses in the quality, availability and timing of economic data constitute challenges for the creation of enlightened policies.

However, the International Foundation team promises that these measures do not rise to what is required to enable recovery from the crisis. Without progress, the monetary economy and the irregular economy will continue to grow, raising significant organizational and regulatory concerns. Also, bank deposits are still frozen, and the banking sector is unable to provide credit for the economy, as the government and parliament were unable to find a solution to the banking crisis.