Lebanon to seek up to $5bn in soft loans, prime minister rallies support

Prime Minister Hassan Diab meets with French Ambassador to Lebanon Bruno Foucher, in Beirut, Lebanon Jan. 23, 2020. (Dalati Nohra/Handout via Reuters)
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Updated 23 January 2020

Lebanon to seek up to $5bn in soft loans, prime minister rallies support

  • The new government faces an emergency in which banks have imposed controls
  • The Lebanese pound has weakened and protesters have turned to violence

BEIRUT: Lebanon’s new government must reassure international donors it is serious about reforms to tackle a financial crisis as it looks initially to secure up to $5 billion in soft loans for basic goods, its finance minister said on Thursday.
The government that took office on Tuesday faces an emergency in which banks have imposed controls, the Lebanese pound has weakened and protesters have turned to violence which a senior UN official described as “politically manipulated.”
“The entire international community has its eye on what this government will do,” Finance Minister Ghazi Wazni said in televised comments. “What is its program, what are the reform steps, is it ready for support or no?”
Lebanon is looking to secure $4 billion to $5 billion in soft loans from international donors to finance purchases of wheat, fuel and medicines, The Daily Star newspaper had earlier quoted the minister as saying.
“This injection will cover the country’s needs for one year,” said Wazni.
Bank restrictions on access to cash, inflation and job losses have hit people hard. Increasingly violent though more limited protests have replaced jubilant demonstrations against a political elite blamed for driving Lebanon toward collapse.
Interior minister Mohammed Fahmi said the state would not tolerate attacks on security forces who he said would protect people’s rights, including freedom of expression.
On Wednesday, protesters broke stone slabs off buildings in a luxury commercial district of Beirut to hurl at barricades guarded by security forces blocking paths to parliament.
“This looks more like a political manipulation to provoke the security forces, to undermine civil peace, to fan up sectarian strife,” Jan Kubis, UN special coordinator for Lebanon, wrote on Twitter, mentioning attacks on security forces and vandalism of state institutions and private property.
The new government was set up with backing from the powerful Iran-backed group Hezbollah and its political allies. Major political parties that have Western backing, including that of former premier Saad Al-Hariri, are not part of the cabinet.
Analysts say the influence of Hezbollah over the cabinet may complicate its attempt to secure foreign funding, particularly from Gulf Arab states that have provided aid in the past but see Hezbollah as a threat.
RESCUE PLAN
Hezbollah’s parliamentary bloc urged the government to hasten its rescue program. The cabinet has formed a committee to draft a policy statement to be presented to parliament.
Prime Minister Hassan Diab met several foreign ambassadors as the heavily indebted government looks to rally support. It must decide how to deal with maturing Eurobonds, including a $1.2 billion bond due in March.
Diab’s office said British Ambassador Chris Rampling conveyed Britain’s readiness to support Lebanon but that the government “must show its commitment to reform that Lebanon needs urgently.”
The European Union’s ambassador to Lebanon, Ralph Tarraf, said he had agreed with Diab on the need for Lebanon to “focus on economic files, address the crisis and institute structural reforms,” two local media outlets reported.
Foreign governments and institutions have demanded Lebanon enact long-delayed reforms to curb state waste and corruption before any new financial support is released.
US Secretary of State Mike Pompeo said on Wednesday only a government “capable and committed to undertaking real and tangible reforms will restore investor confidence and unlock international assistance.”
Lebanon won pledges exceeding $11 billion for a program of infrastructure investment at a 2018 international conference, conditional on such reforms.


Former Egyptian President Hosni Mubarak dies

Updated 41 sec ago

Former Egyptian President Hosni Mubarak dies

  • The 91-year-old was reported to be in intensive care on Monday

Former Egyptian President Hosni Mubarak has died, his family confirmed on Tuesday.

The 91-year-old was reported to be in intensive care on Monday.

On Jan. 24, 2020, his son Alaa Mubarak announced that his father had undergone surgery and that his condition was stable, without going into further details.

Mubarak resigned as president on Feb. 11, 2011 following mass protests across the country. He had served for 30 years.