Source: IMF ready to commit up to $4 billion to new Lebanese government

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Source: IMF ready to commit up to $4 billion to new Lebanese government

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(The Daily Star)-19/07/2021

The International Monetary Fund informed caretaker Finance Minister Ghazi Wazni that the fund was willing to commit $3 billion to $4 billion to any new Cabinet that is committed to economic reforms, a source at the Finance Ministry revealed Sunday.

“A senior IMF official informed Wazni that the fund is willing to commit $3 billion to $4 billion to Lebanon once a new Cabinet is formed and on condition on the reforms that it will carry out. The official added that the international community was also ready to give three or four times of this amount if a new Cabinet is formed,” the source told The Daily Star on condition of anonymity.

The IMF has already pledged to pay Lebanon its share of $860 million in the coming few months even under a caretaker government.

The source stressed that the IMF had made it very clear that could not negotiate a new package deal with a caretaker Cabinet, adding that the fund would only deal with a full-fledged government with full powers.

“The IMF believes that the economic rescue plan presented by Wazni and his team is a good starting point and will not accept any changes in the losses of the banking sector mentioned in the report although it may accept some modifications and update to the original paper,” the source explained.

He added that the IMF had agreed to provide technical assistance to the Finance Ministry’s team only.

The source assured that neither Wazni nor most of the ministers in the current Cabinet were seeking a renewal of their terms.

“Wazni and most of the ministers are eager to hand over their posts to the new ministers and are keen to take their vacations,” the source said.

The new Cabinet, if its formed in the near future, has to tackle a variety of thorny issues such as lifting of all subsidies on essential items and reforming the archaic electricity sector.