Heavily indebted Lebanon has unveiled an unprecedented plan to bring its public finances under control but faces an uphill struggle to restore investor confidence that is needed to stave off crisis.After years of backsliding on reform, fear of economic catastrophe has forced action on Lebanese leaders who have overseen the post-civil war policies that landed the country with one of the world’s heaviest public debt burdens. The budget includes some politically difficult moves such as a three-year state hiring freeze, capping bonuses and a tax on state pensions. “The main test of this budget is whether it can bolster market confidence and usher fresh hard currency inflows that are urgently needed to cover Lebanon’s substantial external financing gap,” said Farouk Soussa, Middle East and North Africa economist at Goldman Sachs.
The Lebanese Foreign Ministry said Lebanon and Israel are close to establishing a framework for negotiations on demarcating the Lebanese-Israeli land and maritime borders. In a statement, it said the form of negotiations to be held under United Nations auspices and the role of each of the concerned parties is still being worked out. The statement came after a meeting Tuesday between Lebanese Foreign Minister Gebran Bassil and U.S. Acting Secretary of State David Satterfield. He has been shuttling between the two countries to mediate in the border dispute.