Lebanon caretaker PM warns of total collapse if reforms not implemented
The caretaker PM’s warning comes as the Central Bank is considering completely halting its funding of the Lebanese state
(Photo credit: Dalati Nohra/Handout via Reuters)Lebanon’s caretaker Prime Minister, Najib Mikati, warned on 3 August that the country’s total economic collapse will be imminent in the event that the Central Bank and its newly appointed governor fail to implement reform policies called for by the International Monetary Fund (IMF).
“Lebanon will not be able to secure medicine or pay salaries in foreign currency, in the event that the monetary and economic plan presented by the Acting Governor of the Banque du Liban, Wassim Mansouri, is not approved,” the caretaker prime minister said.
“Mansouri’s plan is consistent with the government’s plans, and our goal is to approve these plans and not waste time because the goal is to save the country,” he said.
In reference to consultations made recently between Mikati and the interim bank governor, the former said that there is “harmony [in the Central Bank] with the government’s plans.”
However, Lebanese media reported on 3 August that the Central Bank is considering completely halting its funding of the state as of Monday, 7 August.
Upon taking the reins of the Central Bank following the end of Riad Salameh’s term last month, Mansouri said: “I will not sign on any expenditure for financing the government if it contravenes with my principles or the appropriate legal framework.”
Days later, on 3 August, Lebanon’s parliament failed to pass a law that would allow the state to borrow foreign currency from the Central Bank. Mansouri’s condition for lending funds to the state from the Central Bank was the passing of the law, and the reimbursement of the funds “through a realistic plan,” Naharnet reported.
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