Beirut: European Commissioner for Crisis Management Janez Lenarcic has urged Lebanon to reach a bailout agreement with the International Monetary Fund (IMF) in an effort to get out of its economic plight.
At a press conference held here to conclude his two-day visit to Lebanon, Lenarcic said on Friday that the country is going through a difficult situation as a result of multiple crises, including a financial crisis, political paralysis, and the Syrian refugee problem, reports Xinhua news agency.
Speaking of a 60-million-euro ($65 million) humanitarian aid he announced on Thursday for the most vulnerable people in Lebanon, he said the aid “is not a sustainable solution in the long term, but rather emergency aid to save life”.
“It is essential to start addressing the roots of the multiple crises in Lebanon. Comprehensive governance and an agreement with the IMF are prerequisites to pave the way for much-needed reforms for a better future for the Lebanese,” the official said.
Progress towards finalizing a $3 billion bailout package from the IMF for Lebanon has largely stalled as the country has yet to implement required reforms.
For nearly three years, Lebanon has been assailed by the most devastating, multi-pronged crisis in its modern history.
The unfolding economic and financial crisis that started in October 2019 has been further exacerbated by the dual economic impact of the Covid-19 pandemic, and the massive Port of Beirut explosion in August 2020, according to the World Bank.
Of the three, the economic crisis has had by far the largest (and most persistent) negative impact.
In July last year, Lebanon was reclassified by the World Bank as a lower-middle income country, down from upper middle-income status.
Unemployment has also increased from 11.4 per cent in 2018-19 to 29.6 per cent in 2022.
Earlier this month, the Lebanese currency collapsed to 100,000 LBP per US dollar for the first time in history.
In 1997, the pound was pegged to the dollar at 1,500 LBP to 1 US dollar, and the two were convertible until October 2019.
Lebanon’s economists have been calling on authorities to elect a new president and form a new cabinet to end the political deadlock and allow the country to implement necessary reforms and stop the collapse.
