Lebanese PM seeks to secure unity over austerity measures

Prime Minister Saad Hariri has stepped up his consultations with various blocs in a bid to secure political consensus over the “difficult measures” the government plans to take to reduce the budget deficit

  
Lebanon's Prime Minister Saad Hariri gestures during the Paris Peace Forum after the commemoration ceremony for Armistice Day, 100 years after the end of the First World War, in Paris, France November 11, 2018. Thomas Samson/Pool via REUTERS

Lebanon's Prime Minister Saad Hariri gestures during the Paris Peace Forum after the commemoration ceremony for Armistice Day, 100 years after the end of the First World War, in Paris, France November 11, 2018. Thomas Samson/Pool via REUTERS

BEIRUT: Prime Minister Saad Hariri has stepped up his consultations with various blocs in a bid to secure political consensus over the “difficult measures” the government plans to take to reduce the budget deficit, a key demand of international donors, sources close to the premier said Monday. “Prime Minister Hariri has launched series of consultations aimed at ensuring a political cover for the difficult measures the Cabinet plans to take to generate revenues for the Treasury and reduce the budget deficit,” a source close to Hariri told The Daily Star.

The source referred to Sunday night’s meeting held at Hariri’s Downtown Beirut residence that brought together Finance Minister Ali Hasan Khalil from the Amal Movement, Foreign Minister Gebran Bassil, the head of the Free Patriotic Movement, Hussein Khalil, a political aide to Hezbollah leader Sayyed Hasan Nasrallah, and MP George Adwan representing the Lebanese Forces.

No details emerged from the meeting, but the FPM-affiliated OTV said Monday: “The most notable topics discussed were the budget and the difficult actions that must be taken.”

The Central News Agency, quoting political sources familiar with the ongoing consultations, said the meeting was held not only against the backdrop of Hariri’s repeated talk about “difficult austerity measures” required to avert an economic collapse, but it also came a day after Bassil spoke about “difficult decisions” that the Cabinet needs to take, warning civil servants that if they did not accept cuts in their salaries and incentives, there would be no salaries and the economy and the Lebanese pound would collapse.

Last week, Hariri had discussed the draft state budget and the new electricity plan endorsed by the Cabinet with LF leader Samir Geagea.

The Cabinet is slated to meet at Baabda Palace Thursday to begin discussing the 2019 draft state budget, a Baabda Palace source previously told The Daily Star. “After having endorsed the electricity plan, the Cabinet will focus its efforts on accelerating the approval of the 2019 draft budget,” the source said.

Youth and Sports Minister Mohammad Fneish, one of three Hezbollah ministers, said he has not yet received the Cabinet meeting agenda, which is usually distributed to ministers 48 hours ahead of the session. “If the Cabinet meets Thursday, the 2019 draft budget will be the main item on the agenda,” Fneish told The Daily Star.

Both Hariri and Khalil have said the budget would include austerity measures and reductions in spending in a bid to slash the budget deficit, which stood at $7.6 billion last year. Neither Hariri nor Khalil has so far elaborated on the austerity measures the government plans to take to boost the flagging economy, reeling under $85 billion in public debt.

Khalil has submitted to Hariri a revised 2019 draft budget, which contains reductions in all ministries’ spending. He has said that if the budget’s proposed austerity measures prove successful, the deficit-to-GDP ratio could be cut by 2.5 percent in 2019, to bring it down to 9 percent. Reducing the deficit-to-GDP ratio, which reached 10 percent in 2018, by 1 percentage point every year over five years was one of the key pledges Lebanon made at the CEDRE conference. Hariri’s consultations on cutting the budget deficit coincided with renewed Western appeals to the government to carry out key economic and financial reformed recommended at the CEDRE conference.

British Ambassador to Lebanon Chris Rampling praised the government’s planned measures to reduce the budget deficit.

“I welcomed the prime minister’s strong commitment to tackling the government deficit through measures in the 2019 budget, as well as the political consensus over taking the necessary steps to reform the electricity sector,” Rampling said after meeting with Hariri at the Grand Serail. “As I told the prime minister, I and the rest of the international community now look forward to seeing the implementation of these plans. Lebanese and internationals are looking for these steps: While they are difficult, they are crucial in sending the positive signs that Lebanon needs,” he added.

French Ambassador to Lebanon Bruno Foucher also stressed the need for reforms in Lebanon’s budget during a meeting with Speaker Nabih Berri at Ain al-Tineh. He warned that failure to enact reforms would impede the release of pledged funds at the CEDRE conference.

Meanwhile, the Higher Defense Council called after its meeting Monday on relevant ministries to take necessary measures to stop the smuggling of people and goods, as well as the unlicensed workers across the land border.

The council, which met under Aoun at Baabda Palace, discussed the security situation, particularly in south Lebanon, and measures to beef up security ahead of the Easter holiday, which begins later this week for Christians observing the Western calendar. “The participants discussed the topics on the agenda, especially the security situation in the country and the smuggling of people and goods across the land border, and the unlicensed labor force,” the council’s Secretary-General Mahmoud al-Asmar said in a statement after the meeting. The meeting was attended by Hariri and the defense, justice, interior, finance, justice, economy and foreign ministers. Heads of military and security agencies, including Lebanese Army Commander Gen. Joseph Aoun, also attended.

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