$3 billion… Will the initial agreement with the IMF pave the way for a solution to the Lebanese financial crisis

Amid arduous negotiations during which Lebanon seeks to obtain a loan from the International Monetary Fund to overcome its financial crisis, the Lebanese government has reached a preliminary agreement with the Fund regarding a $3 billion loan program to be implemented over a period of 4 years.
The Association of Banks in Lebanon welcomed the signing of the initial agreement between the government and the IMF at the expert level, and said that it paves the way for a financial rescue package in exchange for a set of reforms.
The association said in a statement that it expected the plan to include a “fair distribution” of the losses incurred by the banking sector to the government and the Central Bank of Lebanon, in order to enhance the process of depositors’ recovery of their deposits.
And the Governor of the Central Bank of Lebanon, Riad Salameh, had confirmed that the agreement with the International Monetary Fund would contribute to unifying the exchange rate of the dollar against the local currency (the lira).
Salameh described the conclusion of the agreement at the level of experts with the IMF, as a “positive event for Lebanon”, pointing out that it will lead to the unification of the exchange rate, hoping to meet the preconditions set by the IMF to obtain the approval of the Fund Board on the program.
Lebanese Opportunities and Options
Ziad Nasser El-Din, a Lebanese researcher in economic affairs, considered that the agreement with the IMF to pump 3 billion dollars is a preliminary agreement, and it needs a long negotiation process, especially since Lebanon is a consumer and not a productive country, and it needs a minimum amount of money estimated at 6.5 billion dollars annually. .
According to his interview with “Sputnik”, there are question marks about the timing of the announcement of this initial agreement, which coincides with the approaching parliamentary elections, which raises questions about the possibility that the agreement is linked to a political aspect, especially in the issue of gas and an attempt to impose political conditions on Lebanon.
He continued: “The IMF and the government want to impose a plan to distribute losses to depositors, and to blame citizens for the great failure in financial and monetary policies, despite everyone knowing that this failure was under the supervision of a team not far from the International Monetary Fund,” adding: “We are waiting to know the conditions of the IMF.” International Monetary, reforms are required, but will they be passed on conditions from the Fund with political dimensions.”

Nasser El-Din believes that the IMF will be the main factor in blocking Lebanon in any monetary and financial political rescue options, by diversifying the options and Lebanon’s communication with its Arab surroundings and heading east, and any other solutions that may be beneficial to the Lebanese economy more than the reality of the International Monetary Fund, in light of the reality The political situation in Lebanon and the presence of politicians who are essentially dependent on Western policies, and they have no problem in handing Lebanon over to the West without taking into account the options that can save Lebanon.
He explained that “Lebanon is losing many important options and opportunities in saving its economy in better and more important ways than the IMF, which will give Lebanon $3 billion over 4 years, and we will wait to see if the state and politicians will carry out the required reforms or not.”
big gap
In turn, the Lebanese civil activist, Osama Wehbe, considered that reaching the $3 billion in the initial agreement between Lebanon and the IMF is not an easy thing at all, as it is linked to the reforms of the current political authority that is unable to implement them, and that these funds will come in installments and they will not be able to To cover the large gap in the financial system, which needs more than 60 billion dollars to bridge the deficit.
According to his talk to “Sputnik”, this amount is to cut time, but it is linked to reforms, and if the authority is unable to implement them, these funds will not come, considering that the authority is unable to carry out reforms because they constitute a contradiction to its interests, and to silence the waste shops from which the parties of this corrupt system finance, which You are trying to get the money without doing the reforms, and this will not be because the IMF is monitoring all the steps of the government and making sure of everything related to the reforms.
Wehbe believes that there is an urgent need for an integrated plan that restores confidence first to Lebanese, Arab and foreign investors, the confidence that returns the looted funds of the Lebanese and held in banks, as there is no value to the economy if depositors remain unable to access their money.
He stressed that all these preliminary and patchwork agreements will not be the final solution to the major crisis, but it can be considered a first step on the path of a thousand miles, and Lebanon is waiting for many things, the most important of which are the parliamentary elections. Lebanese.
International Monetary Fund
The sources of the Lebanese delegation negotiating with the International Monetary Fund revealed to local media that “the basic agreement with the IMF has not yet begun, and the party that concludes it is the management of the Fund with the Lebanese government, and not the technical delegation at the staff level, but it can be said that we have stepped in.” The first step, and it remains for us to implement the conditions required by the fund as a mandatory passage to sign the final agreement.”

To conclude the final agreement, the IMF requires several laws that must be issued by Parliament, including restructuring, capital control, amending banking secrecy, and the budget law, in addition to financial auditing of the accounts of the Bank of Lebanon, and unifying the exchange rate “which the Central Bank must have taken decision in this regard,” according to the negotiating delegation’s sources.
The sources described what was signed with the fund as “more than a framework agreement, because we went into the details and presented what became known as the recovery paper, and it includes accurate numbers and not only broad lines, but indicators, numbers and a detailed plan over four years, but it will only be valid with the approval of the administration.” In order for it to be considered, Lebanon must have implemented the preconditions, meaning that the IMF will not release any penny until after the conditions are implemented, at which point the final signature will take place.
And the Lebanese Deputy Prime Minister, His Excellency Al-Shami, announced, last Sunday, “the bankruptcy of the state and the Central Bank of Lebanon,” and said that the losses would be distributed to the state, the Banque du Liban, banks and depositors.