BEIRUT: The cabinet of bankrupt Lebanon, at its final session on Friday, passed a financial recovery plan needed to secure international aid, but its implementation will depend on the fractious incoming parliament.
The session came five days after Lebanon held its first election since an economic crisis, widely blamed on corruption and negligence by the ruling elite, dragged the country to the brink of becoming a failed state.
“Any delay in implementing the financial recovery plan will be very costly to Lebanese,” Prime Minister Najib Mikati said at a press conference after cabinet met.
The International Monetary Fund and Lebanon in April struck a conditional deal for $3 billion in aid. Enacting reforms, including a financial recovery plan, is one of many prerequisites for the package, and analysts have expressed scepticism that the reforms can take place.
It will be up to the new government and parliament to implement the plan approved by the outgoing cabinet. The financial plan passed by ministers includes restructuring and recapitalising the banking system, and protecting small depositors “as much as possible”, according to an official five-page document seen by AFP.
Sunday’s election yielded a polarised and fragmented legislature likely prone to the kind of deadlock that has characterised Lebanese politics for decades.
This could complicate the formation of a new government and delay implementation of the reforms.