Lebanon faces 'tough choices' ahead of IMF talks as the US envoy wraps up visit: What’s next for the country?

Report by Lea Fayad, English adaptation by Karine Keuchkerian

As U.S. Deputy Special Envoy for the Middle East Morgan Ortagus concludes her visit to Lebanon, questions arise over the country's next steps. 

Time is not on Lebanon’s side, with just a few days remaining before the first major deadline before the international community: the International Monetary Fund (IMF) meetings in Washington on April 21.

What needs to be done, and what can still be achieved? The negotiating delegation must bring three key banking, financial, and administrative steps to the table.

The first is the amendment to the banking secrecy law, which reduces banking secrecy with retroactive effect for the last 10 years. The draft decree was referred to Parliament after being approved by the Cabinet in March.

Second, the government has stated that appointments to the Council for Development and Reconstruction will be confirmed in an upcoming Cabinet session.

The third and most difficult step is the banking reform and regulation bill. This law will determine which banks can continue and increase their capital and which will be liquidated. 

The IMF has agreed to defer the discussion on losses and the return of deposits to depositors until after April 21, as the issue needs more time for discussion and determination.

The Cabinet will review this bill on Tuesday. However, according to sources, "the path is not easy," with several ministers raising concerns. 

For example, how can they determine which banks are viable without knowing the extent of the losses? Why not wait to determine the losses before passing the law? Why does the law grant powers to the Banking Control Commission, which is part of the banking sector, instead of an independent body?

Even after the laws are referred from the Cabinet to Parliament, the key question remains: What will happen after these laws are approved if the country falls back into the same scenario of blame-shifting between the government and Parliament, which derailed the initial agreement with the IMF in 2022?

According to government sources, Morgan Ortagus told officials that the international community does not intervene in such details and will evaluate the performance of the state as a whole.

Thus, the international community will base its stance on Lebanon's positive intent and cooperation in fulfilling the required tasks.