Aoun : Lebanon will have to accept IMF’s tough conditions

FILE PHOTO: The IMF logo is seen outside the headquarters building in Washington
The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington. (REUTERS)

Lebanese President Michel Aoun said on Friday that his country will have to accept tough conditions from the International Monetary Fund (IMF) to get out of its deteriorating financial situation, a local media outlet reported.

President Michel Aoun is shown during his meeting with the ISG group on Monday April 6, 2020

“We may have to accept tough conditions suggested by the IMF in return for its financial support, which falls in the interest of the our country by encouraging us to make brave decisions,” Aoun was quoted as saying by Elnashra, a local independent newspaper.

The president also said he will discuss with the IMF the losses Lebanon has to suffer for hosting a big number of Syrian refugees.

“The cost of hosting refugees reached 25 billion U.S. dollars until 2018,” he said, adding the closure of Syrian borders has caused Lebanon a total of 43 billion dollars in losses.

Lebanon has submitted an official request to the IMF for funds for restructuring its public debt and implementing necessary reforms in the country. Enditem

IMF conditions

Gharbis Eradian, chief economist for the Middle East and North Africa MENA, at the Institute of International Finance IIF, said the IMF may request some “conditions” in order to approve the financing of Lebanon’s rescue plan, al-Joumhouria daily reported on Friday.

The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington. (REUTERS)

According to the daily, Eradian said the international lender may request Lebanese authorities to implement some of the terms as follows:

1- Unify the official and parallel exchange rate (of Lebanese pound to the dollar); move to a flexible exchange rate, as is the case in Egypt.

2- Approve some of the decrees and laws presented to the Parliament including the judicial independence law, appointment of EDL’s regulatory authority and the board of directors; and the public procurement law.

3- Close all illegal crossings and combating smuggling.

4 – Impose fines on illegal maritime property.

5- In addition to other technical measures related to quantitative performance standards, which include total cash and credit, international reserves and financial behavior.

Last week, Lebanon signed a request for financial help from the International Monetary Fund, initiating a long process the government hopes will ease the country’s worst post-war economic crisis.

Lebanon is in the thick of its worst economic crisis since the 1975-1990 civil war.