Escalating tensions over borrowing responsibility between cabinet, parliament

Amid mounting challenges and political discussions in Lebanon, the responsibility for borrowing from the central bank has become a contentious issue between the parliament and the government.

Both parties are aware of the legal and practical ramifications, including how borrowed funds will be repaid, the intended duration, and the funding sources.

Government sources emphasized the exceptional nature of the situation and stressed the need for everyone to shoulder their responsibilities, free from political exploitation.

On the other hand, certain MPs from Speaker Nabih Berri's bloc believed it is the caretaker government's duty, as the executive authority, to secure the state's expenses rather than the responsibility of the deputies.

Consequently, the parliament will study the government's request presented in a detailed draft law, considering factors such as the required amount, the necessity for it, its allocation, and how the government will repay the funds it receives.

However, the cabinet has tasked Finance Minister Youssef Khalil to engage in dialogues with acting central bank governor Wassim Mansouri and the bank's deputies.

These discussions have begun and are set to intensify in the coming week.

However, sources from the central bank clarified that their consultations pertain primarily to monetary matters, and anything related to financing requires a specific law.

Amid the ongoing dispute between the government and the parliament, sources within the Central Bank of Lebanon indicated that the acting central bank governor is unconcerned with the discussion surrounding borrowing, financing mechanisms, and methods.

Moreover, it was clear from the outset that the focus should be on implementing reforms, and if the government requires funding, the central bank can assist within the confines of the law and in a limited manner. The law issued by the parliament serves as a mandatory framework for expenditures, and without it, not a single dollar can be disbursed for obligatory expenses.

According to legal sources, any decision by the government to spend from the mandatory reserve or any law issued by the parliament in this regard may be subject to appeal before the Shura Council or the Constitutional Council in the second case.

Additionally, the reason for that is evident as it would potentially infringe upon Article 15 of the Constitution, which safeguards individual ownership, and the chances of a successful appeal are significant.

However, LBCI sources mentioned that in the coming week, Mansouri will provide precise figures regarding the foreign exchange reserves, the bank's liabilities, and the remaining SDR funds. This move aims to ensure transparency and keep the Lebanese people informed about these matters with clarity.