Lebanon needs comprehensive, equitable reforms : IMF

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)

By Andrea Shalal

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

WASHINGTON (Reuters) – The International Monetary Fund remains in discussions with Lebanon about possible financing arrangements, an IMF spokesman said on Thursday, adding that it was premature to discuss the scope of any potential program.

Spokesman Gerry Rice declined to give any details on reforms the Fund would require before it would authorize a program, but said the Lebanese government needed to implement comprehensive, equitable reforms in many areas.

He said Lebanon also needed to reach a common understanding about the source and size of the financial losses it faces.

“The discussions are ongoing. These are complex issues that require a common diagnostic of the sources of the losses and the size of the losses in the financial system, as well as on the feasible options to address them in an effective, and equitable manner,” Rice said during a regular briefing held online.

Lebanon is grappling with an acute financial crisis seen as the biggest threat to its stability since the 1975-90 civil war. Its currency has fallen amid a hard-currency liquidity crunch, which led the state to default on its sovereign debt in March.

The heavily indebted country has been sliding deeper into trouble since October, when a combination of slowing capital inflows and protests against corruption spilled into a political, banking and financial crisis.

Hopes of a quick rescue deal with the IMF have been complicated by a row between the government and central bank over the scale of the losses in the financial system.

Rice’s comments made clear that the IMF expects Lebanon to sort out those differences, and to move forward with a broad series of reforms.

“These are complex issues, which require consensus on how to address the difficult challenge in an effective and equitable manner,” he said. “Comprehensive reforms in many areas are needed and these require ownership and consensus, from society at large.”