Parliament rejects committee formation to investigate deposit 'Loss’

Financial sources have confirmed that the recent visit of the International Monetary Fund (IMF) mission to Lebanon in September included discussions with Speaker of the Parliament Nabih Berri and several MPs regarding the issue of deposits and how they pose a stumbling block to the implementation of the agreement signed by Lebanon with the IMF in April 2022.

This article was originally published in and translated from Lebanese newspaper Nidaa Al-Watan. 

Sources revealed to Nidaa Al-Watan that there had been a hidden request, lingering for months, suggesting that the head of the mission proposed the formation of a parliamentary fact-finding committee to investigate how these deposits were spent.

Based on the results, responsibility for repayment would be determined between the banks and the state, either fully or partially.

However, this request was met with parliamentary rejection, surprising the mission members. The continuous denial of the extent of the losses, humorously referred to as a "gap," also surprised them.

The sources pointed out that the Parliament formed a committee in 2020 to investigate the reality of financial sector losses. Still, it now refuses to repeat the "great experiment" in the issue of the deposit, which has sparked widespread controversy in the country and hindered any notable progress in the long-awaited financial and economic reform program for nearly four years.

Furthermore, the sources believe that the Parliament is evading its role, attributing blame solely to the government, even though there is a draft law in the Parliament to regulate withdrawals and transfers (capital control) that cannot find its way to approval due to alleged disagreements.

Although the Parliament amended the banking secrecy law twice, it remains without the ambition sought by the IMF, which has renewed its request for its amendment.

Parliament also has a profound disagreement over a draft law aimed at rebalancing the financial system.

The sources stated, "This is a small part of the Lebanese Parliament's reluctance to play its role, whether at the committee level or in the absence of the convening of the general assembly in the absence of the President."

The sources added, "The tax reform demanded by the IMF is a contentious issue and finds no receptive ears in the government and Parliament. Those calling for an assessment of the banks' situation ignore that this evaluation exists in the Banking Control Commission, and the government and Parliament can request it to make decisions based on the findings, away from casting accusations of negligence."

It is worth noting that the preliminary agreement with the IMF stipulates limiting the use of public assets and revenues to cover losses and repay deposits.

However, some MPs are trying to place full responsibility on the state, insisting it restructures the old debt, commits to repaying it, and embarks on a new public debt, increasing social spending on a population where 80% live below multiple dimensions of poverty lines.

Moreover, the state is expected to invest in a crumbling infrastructure. Above all, it must bear primary responsibility for deposit repayment. The sources deemed this equation nearly impossible.

In conclusion, the sources stressed, "If the Lebanese can come up with a miracle, the IMF will be very happy and will learn from the experience if it succeeds. But forcing it into an attempt now confirms that its success is among the impossible."