France creates reform roadmap for crisis-ridden Lebanon

Concept paper outlines steps needed to unlock financial aid, including central bank audit and early elections

• 

  Lebanese President Michel Aoun receives French Foreign Minister Jean-Yves Le Drian at the presidential palace in Baabda, east of the capital Beirut, on July 23, 2020. AFP

• 

  President Michel Aoun holds talks with French Foreign Minister Jean-Yves Le Drian at the presidential palace in Baabda. AFP

• 

  President Michel Aoun chairs a meeting with French Foreign Minister Jean-Yves Le Drian at the Lebanese presidential palace in Baabda. Reuters

• 

  Lebanese Prime Minister Hassan Diab, right, welcomes French Foreign Minister Jean-Yves Le Drian in Beirut. AP Photo

• 

  Prime Minister Hassan Diab and French Foreign Minister Jean-Yves Le Drian hold talks at the governmental palace in Beirut. AFP

• 

  Prime Minister Hassan Diab chairs a meeting with French Foreign Minister Jean-Yves Le Drian. AFP

• 

  French Foreign Minister Jean-Yves Le Drian arrives at Baabda Palace to meet Lebanon’s President Michel Aoun. Reuters

• 

  French Foreign Minister Jean-Yves Le Drian wears a face mask as he arrives at Baabda Palace to meet Lebanon’s President Michel Aoun. Reuters

French President Emmanuel Macron has created a roadmap for Lebanese politicians that outlines the political and financial reforms needed to unlock foreign aid and rescue the country from multiple crises including an economic meltdown, according to a document seen by Reuters.

The two-page “concept paper” was delivered by the French ambassador to Beirut, a Lebanese political source said. A diplomatic source at Mr Macron’s Elysee office said no document has been given to Lebanese parties. A French Foreign Ministry official declined to comment.

The necessary measures include an audit of the central bank, appointment of an interim government capable of enacting urgent reforms, and early legislative elections within a year.

Lebanon’s now-caretaker government, which took office in January with the support of the Iran-backed Hezbollah movement and its allies, failed to make progress in talks with the International Monetary Fund (IMF) for a bailout due to inaction on reforms and a dispute over the size of financial losses.

The government resigned over this month’s huge Beirut port explosion that killed at least 180 people, injured some 6,000 and destroyed entire neighbourhoods, and renewed protests against a political elite over endemic corruption and mismanagement that has led to a deep financial crisis.

“The priority must go to the rapid formation of a government, to avoid a power vacuum which will leave Lebanon to sink further into the crisis,” the French paper reads.

It lists four sectors in need of immediate attention: humanitarian aid and the authorities’ response to the Covid-19 pandemic; reconstruction after the August 4 blast; political and economic reforms and an early parliamentary election.

It also called for progress in IMF talks and United Nations oversight on international humanitarian funds pledged to Lebanon in recent weeks, as well as an impartial investigation into the cause of the detonation of vast amounts of highly explosive material stored unsafely at the port for years.

Mr Macron visited Beirut shortly after the blast and made it clear that no blank cheques would be given to the Lebanese state if it did not enact reforms against waste, graft and negligence.

Since then, he has held multiple phone calls with major political leaders under the country’s sectarian power-sharing system, a Lebanese political source said. Mr Macron is due to return to Beirut on September 1.

Political rivalries and factional interests have prevented the formation of a new government able to tackle the financial crisis that has ravaged the currency, paralysed the banking system and spread poverty.

The French concept paper stresses the need for an immediate and full audit of state finances and reform of the power sector, which bleeds public funds while failing to provide adequate electricity.

Parliament should enact laws needed to effect change in the interim period, it said. “Factions must be engaged to vote on the key measures that the new government will take in the next few months.”

The roadmap could deepen France’s role in Lebanon, a former French colony.

The paper states that Paris will play a major role in rebuilding Beirut port, bolster health care, send teams from its treasury and central bank to support the financial audit, and help organise early parliamentary voting, along with the European Union.