IMF says Lebanon needs fiscal framework, strategy to fix bank sector

FILE PHOTO: International Monetary Fund (IMF) Managing Director Kristalina Georgieva makes remarks during a closing news conference for the International Monetary Finance Committee (IMFC), during the IMF and World Bank's 2019 Annual Meetings of finance ministers and bank governors, in Washington, U.S., October 19, 2019. REUTERS/Mike Theiler

WASHINGTON (Reuters) - The International Monetary Fund is committed to helping Lebanon implement needed reforms, but the country still needs a coherent fiscal framework and a credible strategy to rehabilitate its banking sector, IMF chief Kristalina Georgieva said on Wednesday.

Georgieva, speaking at a video conference hosted by France, said the IMF’s efforts to develop a comprehensive stabilization and reform program had not “gone very far” in recent months given the lack of an empowered Lebanese government, but she was encouraged by the global support being offered.

French President Emmanuel Macron told the conference that a fund would be set up to channel aid directly to the Lebanese people, but warned there would be no international bailout without a credible new government.

The IMF managing director welcomed a framework for reforms unveiled at the conference, and said the Fund would do its part to help implement changes needed to restore solvency in public finances, repair the banking system, and strengthen governance, transparency and accountability.

“Regrettably, despite our multiple engagements at technical level on variety of issues over the last four months, in the absence of an empowered government we have not gone very far in advancing the preparation of a comprehensive stabilization and reform program,” she said.

“Importantly, a coherent fiscal framework that can restore debt sustainability is still lacking, as is a credible strategy to rehabilitate the banking system.”

Georgieva said the Fund looked forward to swift resolution of any issues standing in the way of progress.

Reporting by Andrea Shalal; Editing by Chris Reese and Paul Simao