Lebanon recovery plan held up by changes from PM: Top finance lawmaker – The Peninsula

Lebanon recovery plan held up by changes from PM: Top finance lawmaker – The Peninsula

BEIRUT: Lebanon's top finance lawmaker said prime minister designate Najib Mikati had verbally proposed "very serious" changes to a recently-adopted plan to revamp the collapsed financial sector, in a move that could delay progress towards a final IMF deal.

Lebanon's government reached a draft agreement for a $3 billion IMF bailout in April, with a full deal conditional on the passage of pre-conditions such as the 2022 budget, banking secrecy reform and capital controls.

Mikati's last government adopted a financial recovery plan on May 20 that set the broad outlines of how to address a more than $70 billion hole in the financial sector at the core of Lebanon's crisis.

That plan placed the burden of losses on commercial banks and the central bank as well as on depositors via haircuts, but did not adopt a previously proposed fund of state assets or resources to plug the gap.

But Mikati last week suggested "very serious" changes to that plan verbally during a meeting with the parliamentary finance and budget committee, said Ibrahim Kanaan, the committee's chief.

"We were told by the prime minister that it has been changed in a way that there is a financial recovery fund that will compensate the depositors or will