In an article in An-Nahar newspaper, Salwa Baalbaki wrote: It appears that the latest round of talks between the Lebanese government and the International Monetary Fund delegation has witnessed a noticeable shift, as it has moved from a stage of stagnation to greater dynamism. Instead of simply exchanging general positions, the discussion became focused on technical details, which indicates a change in the nature of the dialogue and its direction towards a more in-depth and serious treatment of the topics at hand.
The upcoming spring meetings in Washington are expected to be a critical test of the credibility of Lebanese commitments. These meetings could pave the way for a final agreement that reconnects Lebanon with the international financial system, or they could turn into a wasted opportunity that returns the country to a vicious cycle of indecision if reforms falter or the required legislation is delayed.
The negotiations are taking place on two parallel tracks. The first relates to establishing a medium-term financial framework aimed at regulating the course of public finances. The second track focuses on amending the banking reform law in response to the Fund’s observations, in an attempt to find a realistic solution to the financial gap. However, the final decision remains fundamentally political. The spring meetings in Washington will be crucial to assessing the seriousness of Lebanese pledges, as they will decide whether to solidify an agreement that reconnects Lebanon to the global financial system, or return to the current state of stalemate. The Minister of Finance, Yassin Jaber, acknowledged that the previous stage was characterized by hesitation and denial, while the current approach depends on moving from crisis management to establishing a comprehensive reform framework based on regulating public finances within a medium-term vision, and restructuring the banking sector in a way that allows for the distribution of losses, addressing the gap, and gradually restoring confidence. For his part, Samir Hammoud, advisor to the Minister of Finance, believes that the negotiation process goes beyond a mere technical discussion, as he explained in an interview with “An-Nahar” that the dialogue with the IMF went beyond procedural details to structural files presented in the Council of Ministers, and is focused on two main issues. The first relates to the Medium-Term Financial Framework (MTFF), which has been re-included on the agenda of the Council of Ministers in preparation for its approval, and its importance lies in its being a tool for reorganizing public finances over a period of three years, allowing for a systematic transition from the 2025 and 2026 budgets to the 2027 budget, while stabilizing previously unlisted obligations, especially Eurobond obligations and other accumulated pledges. Hammoud confirms that the essence of the proposal is to move from circumstantial annual budgets to financial planning based on a clear sustainability vision.
The second issue relates to the banking reform law approved by the House of Representatives. Hammoud explains that the IMF’s observations do not aim to abolish the law, but rather to introduce amendments and reformulations related to defining concepts and clarifying mechanisms. According to the proposed path, the study of the observations will be completed, the amended articles will be reformulated, presented to the Constitutional Council when necessary, and then referred again to the Parliament for approval in its final form. Hammoud stresses that approving the financial framework and banking reform together is the basic condition for participating in the spring meetings with a strong negotiating position. Hammoud is certain that there has been significant progress in negotiations with the IMF, which allows participation in the spring meetings from a more coherent position, especially with regard to banking reforms. However, addressing the financial gap may take longer, which the Fund also understands. Hammoud stresses that prior legislative achievement is the decisive factor, as he indicates the Speaker of Parliament’s readiness to pass the banking reform law before the spring, which allows the executive authority a narrow window of time to translate pledges into effective laws.
