Mansouri and the Finance Committee besiege the government in times of war

A governmental source expressed deep concern over the nonchalance of some individuals who seem to disregard the looming war in the region while making statements that further strain the country's finances.

The source stressed that financial demands would be immense in the event of war. Still, only meager resources would be available due to the economic crisis's impact on the state's budget.

This article is originally published in, translated from Lebanese newspaper Nidaa al-Watan.

The source revealed that the Disaster Management Authority has held more than five meetings since last Thursday, primarily focusing on the lack of funds to cover even the most basic war-related necessities.

Prioritizing healthcare and medical services, the Health Ministry's budget is at most $35 million. It may reach $100 million with additional local resources, a fraction of Israel's $11 billion allocated to public health.

However, the governmental source referenced statements made by Lebanon's Acting Banque du Liban (BDL) Governor, Wassim Mansouri, and some Parliamentary Finance and Budget Committee members.

Mansouri has consistently stated that the BDL would not finance the government in Lebanese lira or US dollars. He emphasized the bank's monetary policy to control the money supply in Lebanese lira to avoid impacting the exchange rate. This limits the government's spending, even from the revenue it collects. Tax revenue is expected to decrease significantly during any potential war, which may extend for months, as some predictions suggest.

Regarding the parliamentary committee meeting held on Monday to discuss the 2024 budget, the source highlighted the suspension of government borrowing approval.

Many MPs argued that the approval of borrowing authority, without setting limits, has been a critical element in the country's financial collapse. Others suggested that there is no longer any justification for this authorization, especially since the government stopped repaying "Eurobonds" in March 2020, the banking sector faltered, and the BDL was neither willing nor capable of lending to the state.

The source also mentioned the suspension of Article 7, related to accepting grants and loans, and Article 8, allowing the government and the Finance Minister to transfer allocations between budget items. The source concluded by stressing that these circumstances require exceptional measures.

It raised questions about whether it would be justifiable to mortgage part of the country's gold reserves to obtain the necessary dollars, seek emergency assistance from Arab and international countries on the first day of the war, or request emergency loans from the World Bank and other financial entities, as done during the COVID-19 pandemic.

In closing, the source warned, "A significant catastrophe is inevitably awaiting us!"