Beirut's political game: Tensions mount in Lebanon as government seeks approval for borrowing

Lebanon Economy
2023-08-04 | 00:45
High views
Beirut's political game: Tensions mount in Lebanon as government seeks approval for borrowing
Beirut's political game: Tensions mount in Lebanon as government seeks approval for borrowing

The most prevalent policy in Beirut now is "buying time." Everyone is engaged in this game, awaiting the end of the summer break (August) and the return of the French presidential envoy, Jean-Yves Le Drian, to Beirut in the coming September. 

This article was originally published in and translated from the Lebanese newspaper al-Akhbar.

Amidst this fragile status quo, complications are increasing, heralding a comprehensive crisis and a situation spiraling out of control. There is no clearer evidence of the fate that awaits the country than the "chaotic" management of Prime Minister Najib Mikati.

The predicament surrounding the government's borrowing legislation continues to unfold. 

After initially promising to provide their definitive stance on PM Mikati's draft law during a session last Tuesday, ministers deferred their decision. Mikati then redirected the matter to the Parliament, advocating for a legislative proposal from the deputies to authorize government borrowing. 

On Thursday, Mikati persisted in his efforts to shift responsibility, requesting Finance Minister Youssef Khalil to liaise with the deputy governors to identify the most viable route for securing their approval, whether through the government or the Parliament. 

Yet, this endeavor seems insurmountable for two primary reasons: the first is the ongoing debate over the legislative principle in the absence of a president, and the second is related to the source of the return of funds, as mentioned in the draft text.

Ministerial sources told al-Akhbar, "Mikati did not discuss the matter  in the session with the ministers, and he received communications from government entities requesting a delay in the deliberations as they continue to assess their position." 

The sources emphasized that "the legal framework for borrowing lacks political and constitutional consensus within both the government and the Parliament." 

Notably, neither Parliament Speaker Nabih Berri nor Hezbollah support the notion of the "General Assembly" overseeing this law. 

Even the Free Patriotic Movement, whose leader Gebran Bassil informed members of the Central Council of his support for the four deputy governors' demands, conditioned its endorsement on the passage of reform laws, including the 2023 budget, bank restructuring, financial stabilization, and capital controls.

Parliamentary sources told al-Akhbar that "none of the parliamentary blocs will dare legislate deposit withdrawals at present," especially with no government assurances for their return. 

Despite the government's assertion that these funds will eventually be restored, sources highlighted a critical gap in the 18-month repayment plan. 

The draft suggests securing the funds from state revenues, intervention by the central bank as both buyer and seller of foreign currency, or from state assets. 

The latter option remains problematic, as there are many questions related to these assets and according to which fund, especially since it did not specify which assets it was referring to, and the so-called trust fund has not yet been approved.

Consequently, political circles have begun expressing concerns about a potentially crippling scenario if the central bank refrains from lending to the government. 

Such a scenario would halt all state payments, potentially leading to a catastrophe. Amidst this, talks have resurfaced regarding Parliament Speaker Berri's request for the resignation of the First Deputy Governor, Wassim Mansouri.

Regarding the presidential file, expectations for the upcoming month have become increasingly uncertain, given the factions' lack of substantive and serious political communication. 

Only dialogue between Hezbollah and the Free Patriotic Movement continues along a track reaffirmed by both sides. Informed sources noted that Bassil's proposals were not yet subject to discussion, waiting for the movement's leader to send the proposed laws for approval before the presidential settlement, particularly concerning decentralization and trust fund projects. 

Meanwhile, insiders from the Free Patriotic Movement stated, "the first project has made progress, building upon the 2014 decentralization proposal with certain amendments, while the second project requires further time."

Simultaneously, Le Drian has requested that Lebanese political forces draft a set of dialogue conditions and specifications for the president and send them to him. 

These guidelines are intended to formulate a logical and agreeable agenda that satisfies all parties.

This will determine whether the dialogue will be conducted in a unified setting or through bilateral or trilateral negotiations among the relevant factions. 

This stance corresponds to ongoing negotiations with parties, including the Lebanese Forces, who remain opposed to dialogue.

Lebanon News

Lebanon Economy

Press Highlights








Central Bank

Prime Minister

Najib Mikati

Jean-Yves Le Drian

Wassim Mansouri

Fuel prices rise in Lebanon
Download now the LBCI mobile app
To see the latest news, the latest daily programs in Lebanon and the world
Google Play
App Store
We use
We use cookies to make
your experience on this
website better.
Learn More