Lebanese PM to meet financial adviser Lazard soon on bailout
- Lebanese prime minister gives most detailed comments to date on crisis
- Said to meet Lazard, looking for a “more realistic” plan
- Lebanon would have the chance to get the IMF framework by the end of the year
- Wants to protect small depositors
BEIRUT, Sep 27 (Reuters) – Prime Minister Najib Mikati will meet with consultancy Lazard soon to see how a financial recovery plan he has drawn up for Lebanon could be turned into a “more realistic” vision to get the country out of his crisis, he said on Monday.
Mikati also said Lebanon would be very lucky if it manages to strike a deal with the International Monetary Fund by the end of the year. Mikati took office earlier this month determined to restart talks with the IMF.
Billionaire tycoon, Mikati faces a difficult path to remedy one of the most serious financial collapses of modern times. Challenges include the limited shelf life of his government, with elections slated for next spring.
In the most detailed comments to date on his approach to attempting to reverse Lebanon’s devastating financial crisis, Mikati said in an interview with broadcaster LBCI that there would be a fair distribution of losses in the financial system and for protect small depositors.
Lazard helped the previous government craft a financial bailout that identified losses of some $ 90 billion in the financial system.
But the plan was rejected by objections from the banks, who said it made them pay too much of the bill for the collapse, in addition to opposition from the central bank and the political elite to the power that plunged Lebanon into its crisis.
Reaching an agreement on the losses is seen as the first step towards a deal with the IMF, which approved the figures from the previous government’s plan.
“I will not announce anything unless the whole financial recovery plan is complete,” Mikati told LBCI.
“We have the financial recovery plan, I have asked the company that put it in place to come to Lebanon and they will come and I will have a meeting with them in the next few days … to see how we can update this plan, âMikati mentioned.
“I want to ask for a more realistic plan to get out of this crisis in which we find ourselves,” he added.
Mikati said he does not plan to privatize state assets.
WANTS TO PROTECT SMALL DEPOSITORS
A deal with the IMF is seen as the only way for Lebanon to access aid from foreign donors who demand reforms to tackle the root causes of the collapse, including corruption and state waste. .
“We will be very lucky if we finish before the New Year,” Mikati said when asked how long it might take to reach a deal with the IMF.
“We’ll be lucky if we put the main frame (by then).”
Mikati formed a government after a year of political stalemate that exacerbated an economic collapse that plunged three quarters of the Lebanese population into poverty and saw its currency fall by more than 90%.
Savers were excluded from the crippled banking system, forced to have their hair cut for up to 80% of the value of their deposits on withdrawals.
âI want to protect the depositor as much as possible, the small depositors, I need to see how we can do it, that’s what I’m trying to do,â Mikati said.
“The trend is certainly to protect small depositors who have between $ 50,000 and $ 70,000 in accounts, and those will take their money in dollars for sure.”
Since taking office, Mikati – a Sunni Muslim – has said he will not allow Lebanon to be used as a platform for action against other Arabs, implicit criticism of Hezbollah, a Shiite Muslim group backed by the Iran, which supports its government.
But on Monday, Mikati said he was currently not scheduled to visit Saudi Arabia, which once spent a lot in Lebanon but avoided it for years due to Hezbollah influence, and the Lebanon’s relations with the Gulf have not been discussed with French President Emmanuel Macron. during a visit to Paris last week.
Reporting by Laila Bassam and Maha El Dahan; Writing by Maha El Dahan and Tom Perry; Editing by Angus MacSwan and Grant McCool
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