Lebanese cabinet adopts financial recovery plan – ministerial sources

(Reuters) – Lebanon’s cabinet has adopted an economic recovery plan aimed at pulling the country out of a three-year financial meltdown, two ministerial sources told Reuters on Friday.

Ministers approved the measure in the last cabinet session hours before losing their decision-making powers, following the election of a new parliament on May 15 which is to appoint a new prime minister.

The plan includes several measures that are prerequisites for a bailout from the International Monetary Fund, including a banking sector restructuring plan and reform of a bank secrecy law.

Lebanon reached a preliminary agreement with the IMF in April which lists a number of prior actions that the fund says must be implemented before a full agreement can be reached.

In late April, the Association of Banks in Lebanon (ABL) rejected a draft government stimulus package that it said would leave banks and depositors to shoulder the “major part” of an estimated $72 billion hole. by the government in the financial sector.

A spokesperson for the ABL did not immediately respond to a request for comment on Friday’s events.

Lebanese banks have been the main lenders to the government for decades, helping fund a wasteful and corrupt state that tipped into financial collapse in 2019.

The collapse resulted in depositors being shut out of their savings, with the local currency losing more than 90% of its value.

(Reporting by Maya Gebeily; Editing by Timour Azhari, Hugh Lawson)

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