BEIRUT (Reuters) – French Foreign Minister Jean-Yves Le Drian is expected to urge Lebanon to adopt much-needed reforms to help pull the country out of an acute financial crisis during a visit to Beirut that began on Thursday by a meeting with President Michel Aoun.
The financial crisis, rooted in decades of corruption and state waste, poses the greatest threat to Lebanon’s stability since the 1975-90 civil war. The collapse of the currency led to soaring inflation and poverty, and savers lost free access to their accounts in a crippled banking system.
France has led international efforts to bring Lebanon into reform, hosting a donor meeting in 2018 in which more than $ 11 billion was pledged for infrastructure investments based on promised but unfulfilled reforms.
“(Le Drian) wants to send a strong message to the Lebanese authorities and politicians on the need for urgent reform and to underline our inability and our refusal … to provide economic and financial support until concrete acts and reforms are launched, ”he added. said a diplomat.
Lebanon began talks with the International Monetary Fund (IMF) in May, but these were put on hold in the absence of reforms and due to differences between the government, the banking sector and politicians over the extent of considerable financial losses of the system.
The Lebanese presidency said Aoun had met Le Drian, who is due to give a press conference at the Foreign Ministry later Thursday.
One of the many areas in which donors are keen to see progress is fixing the wasteful public power grid, which bleeds up to $ 2 billion a year in public funds while failing to meet the country’s electricity needs.
Lebanon, with one of the world’s highest public debt burdens, defaulted on its sovereign foreign currency debt in March, citing extremely low foreign exchange reserves. The Lebanese pound has lost around 80% of its value since October.
Reporting by Tom Perry in Beirut and John Irish in Paris, editing by William Maclean
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