EU ready to support govt’s economic rescue plan: EU envoy

BEIRUT: The European Union is ready to support the Lebanese government’s plan to rescue the debt-ridden country from its worst economic and financial crisis, the EU Ambassador to Lebanon Ralph Tarraf said Tuesday.

Tarraf spoke to reporters after he and ambassadors of other EU countries in Lebanon met with Prime Minister Najib Mikati, who briefed them on the government’s financial recovery plan to cope with unprecedented economic meltdown that is hitting the Lebanese hard and threatening them with poverty, hunger and unemployment. The talks also covered cooperation between Lebanon and the EU, which is a major trade partner with Beirut.

“Prime Minister Najib Mikati explained to us the priorities of his government’s program which conform to the policy statement. He explained to us the priorities with regard to the specialized sectors and we expressed our readiness to support the prime minister and the government’s plan of action and what it has promised to implement,” Tarraf said after meeting with Mikati at the Grand Serail.

Apparently referring to previous governments, which due to political differences had failed to deliver on their promises to carry out essential reforms, a key demand of international donors, Tarraf said: “We know that policies in Lebanon are difficult. That’s why not everything that is announced can be implemented. But at least the plans and projects that have been spelled out from our viewpoint deserve support. We encourage in particular the government in its efforts to tackle the economic crisis through which the country is passing. The European Union will always stand by Lebanon’s side.”

Asked whether the EU was confident that the Mikati government would be on the right track with regard to enacting long-overdue reforms, Tarraf said: “So far, we have no sign that it will not be on the right track. We will closely follow up the matter. You know what happened with the previous government. It has become clear that good intentions do not achieve advancement. But in our viewpoint what we have heard from Prime Minister Mikati and from the policy statement and the declaration of intentions and what we know, all these confirm that there is [something] that deserves support.”

Mikati’s meeting with the EU envoys came as the Cabinet has formed a ministerial team to negotiate with the International Monetary Fund on a bailout package to rescue the country from its worst economic depression since the 1975-90 Civil War. The delegation includes the deputy premier, the Finance and Economy ministers and the Central Bank governor.

Lebanon began talks with the IMF on a $10 billion bailout package in May 2020, but the negotiations broke down after a dispute between different interest groups representing Lebanese banks and the government over the size of losses in the Central Bank.

FRENCH ENVOY

The meeting with the EU envoys also coincided with the arrival in Beirut of a special envoy of French President Emmanuel Macron, Pierre Duquesne, who began talks Monday with Lebanese officials aimed at accelerating the government’s reform measures and its preparations to resume negotiations with the IMF on a rescue package.

The visit of Duquesne, who is tasked with coordinating international aid to Lebanon, came against the backdrop of reforms measures agreed on between Macron and Mikati during their meeting at the Elysee Palace last month.

Duquesne, who has visited Beirut several times in the past to prod Lebanese leaders to quickly enact reforms recommended by the CEDRE conference hosted by France in 2018, is charged with following up on the implementation of these reforms, seen crucial for unlocking $11 billion in grants and soft loans promised by donors to the crises-hit country.

Mikati, backed by France and some regional powers, last month formed a new Cabinet of 24 specialists, ending 13 months of a political stalemate that exacerbated the economic crisis, described by the World Bank as one of the world’s worst since the 1850s, posing the gravest threat to the country’s stability since the Civil War.

The EU, in addition to the US and France, have welcomed the formation of a new government in Lebanon, but urged it to quickly undertake essential reforms in order for the international community to come forth with its promised aid to the cash-strapped country and to pave the way for a deal with the IMF to halt the country’s economic collapse.

Ahead of his talks with the EU envoy, Mikati met in the morning with Aoun at Baabda Palace to brief him on the results of meetings he has been holding with ministerial committees tasked with addressing urgent problems facing the Lebanese, such as severe fuel shortages and chronic electricity cuts.

Mikati also briefed Aoun on the phone contact he held with the IMF Monday in preparation for negotiations with the fund.

The IMF said Monday it expected to start technical discussions with Lebanon “in the coming days”. The discussions will revolve around “policies and reforms that will address Lebanon’s economic and financial crisis,” an IMF spokeswoman said in response to a question about Lebanon’s announcement earlier Monday that it has resumed “interactions” with the IMF with a view to agreeing a recovery program that can harness international support.

Meanwhile, German Minister of State for Foreign Affairs Niels Annen met Tuesday with top Lebanese officials to convey his country’s support for Lebanon and welcome the formation of a new government. He called on the government to undertake immediate reforms, while stressing the need for next year’s parliamentary elections to be held on time.

Aoun assured the German minister that Lebanon has begun its contacts with the IMF to launch reforms in tandem with a forensic audit of the Central Bank’s accounts, a key demand of donors, upgrade the ailing electricity sector and rebuild Beirut Port which was devastated last year by a massive explosion that killed 214 people and wounded thousands of others and damaged large swaths in the capital.

Aoun told the German minister that the new government “will work quickly to achieve the reform program for economic revival, and that contacts were made with the International Monetary Fund for this purpose, in conjunction with the continuation of forensic audit which started with the financial accounts of the Central Bank, which will later include ministries, departments, public institutions, councils and funds,” according to a statement released by the presidency’s media office.

Moreover, the president stressed the will to overcome internal and external difficulties facing Lebanon, emphasizing that overcoming these difficulties will be achieved gradually to restore confidence and support of the international community, and that work will be done in this field in order to achieve the desired goal, the statement said.

Aoun also assured Annen that the investigation into the Beirut Port blast will continue to reveal all evidence about he explosion, especially how the ammonium nitrate reached Beirut and was unloaded at the port, knowing that it was sent to another country. Aoun welcomed any technical assistance which Germany could provide in this context.

In addition, the president stated that the reconstruction plan prepared by Lebanon, also includes addressing poverty, rebuilding the port, and other developmental projects.

Annen conveyed German support for the Lebanese people, and stressed the need to strengthen bilateral relations in different fields, especially since Germany has become the second largest donor country to Lebanon. “Germany is determined to continue cooperation for the benefit of the two friendly countries and peoples,” he said.

The German minister also indicated that Germany has provided direct support to Lebanon, and will continue to provide this support, especially after the formation of a new government, and the steps which this government is expected to take in addressing the difficult situation in Lebanon.

Annen pointed out that elections which took place in Germany will result in a new government which will continue to provide the “necessary support to Lebanon and will cooperate with the Lebanese government to achieve all that helps Lebanon’s advancement and stability.”

The German minister later met with Parliament Speaker Nabih Berri and Foreign Minister Abdallah Bou Habib.