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French foreign minister: IMF only way out of Lebanon crisis

BEIRUT (AP) — France's foreign minister said Thursday that talks with the International Monetary Fund are the only way out of Lebanon’s economic crisis, urging Lebanese officials to resume discussions with the lender that faltered over internal disagreements.

Jean-Yves Le Drian, the first Western official to visit Lebanon since its economy began to unravel last year, said only concrete reforms would enable France, a major ally, to help Lebanon.

After meetings with President Michel Aoun and other officials, Le Drian said the time is critical.

“What I want to tell those responsible in Lebanon today is, ‘help yourselves and France and its partners will help you',” he said. “It is the key message of my visit.”

France, the former colonial power in Lebanon, is leading Western efforts to help the Lebanese economy out of its dire straits. The solutions are well-known, Le Drian said, and are necessary to avoid destabilizing Lebanon and its model of tolerance and openness in the region.

The crisis has deepened since the government defaulted on its sovereign debt in March, the eruption of the coronavirus pandemic and the restrictions that it brought. Unemployment and poverty rates have reached new heights, while basic resources, such as fuel, have became scarce as the government's resources dried up.

Talks with the IMF over a recovery plan, which began in May, have stalled over disagreements between Lebanese politicians on assessing losses and how to move forward. Lebanese officials hope successful talks would open the way for $11 billion in aid pledged during a 2018 conference hosted by France.

“There is no alternative to an IMF program that will allow Lebanon to get out of the crisis,” Le Drian said. “France is ready to mobilize itself and its partners to support Lebanon but credible and serious reform measures must be taken,” Le Drian said.

A person close to the discussions between the top French diplomat and Lebanese Prime Minister Hassan Diab said the French are supportive of the Lebanese government's efforts and that both sides recognize the importance of successful talks with the IMF that would also unleash money pledged in the 2018 conference.

“Both France and the (United States) are with us on that,” the person said, speaking on condition of anonymity to discuss the closed meeting.

Diab has said that political rivals and other officials are actively working to fail his government and deny Lebanon international or regional support.

Le Drian said an effective audit of the losses of the Central Bank of Lebanon would help kick-start the talks. The Lebanese government approved this week a forensic audit after weeks of stalling. The audit could take months.

Le Drian said efforts by France would only work if Lebanese officials do their part. He said a reform of the electricity sector, which has cost the government about $2 billion in debt a year, has so far been discouraging.

Lebanon witnessed nationwide protests last October after the government, as part of efforts to introduce austerity measures, levied new taxes on messaging service WhatsApp. Protesters accused the government of mismanagement and years of corruption and eventually forced then-premier, Saad Hariri, to resign.

A new government, backed by the powerful Hezbollah group and its allies, was formed in January and has since been bogged down by domestic rivalries and economic power centers on ways to proceed with reforms and the IMF talks. Adding to the domestic tension is the fact that Hezbollah is facing increased U.S. sanctions, part of Washington's campaign against Iran and its allies in the region.

“The Lebanese have strongly expressed their legitimate aspirations through popular protests since October, they went on the streets to express their thirst for change, for transparency, to fight for corruption and for better governance," Le Drian said. "Their call has not been heard so far.”

The economic crisis has sparked a free-fall of the national currency against the dollar, which had been used interchangeably with the Lebanese pound. Unemployment and poverty have since soared and U.N. aid agencies began wide distribution of food to needy families for the first time since Lebanon's last devastating war with Israel in 2006.

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Associated Press writer Bassem Mroue in Beirut contributed to this report.