IMF denies reports it negotiated with Hezbollah

WASHINGTON, May 27 (Reuters) - The International Monetary Fund denied media reports on Wednesday that it had discussed possible loans with Lebanon's Hezbollah before parliamentary elections next month.

The Financial Times and New York Times on Wednesday reported that Hezbollah had held talks with the IMF and the European Union to secure financial support for Lebanon if its alliance won the election.

"The IMF has not negotiated with Hezbollah members or sympathizers in Lebanon over a possible loan," the IMF said in a statement.

It said an IMF mission visiting Beirut in March for annual consultations on economic policies met with the country's main political parties as part of standard outreach activities that also include talks with nongovernmental groups.

During the talks, it met with Abed Al-Halim Fadlalah, then deputy director of an economic research center that has close ties with Hezbollah, to explain the IMF's visit and "gather support toward economic reforms," the IMF said.

The IMF conducts annual economic consultations with all of its 185 member countries.

"The Fund has a long history of meetings with political parties and/or parliamentarians," the IMF said. "Many Fund missions do this as part of their outreach activities."

"By no means were future Fund arrangements discussed," it added.

Lebanon votes on June 7 in a poll that pits an alliance including Iranian- and Syrian-backed Hezbollah, which Washington classifies as a terrorist organization, against an anti-Syrian coalition now holding a majority in parliament.

Many experts predict gains for Hezbollah and its allies. Russia on Wednesday said the international community must recognize the result of Lebanon's general election regardless of who wins a majority.

Hezbollah is the only Lebanese faction to remain armed after Lebanon's 1975-90 civil war and that has involved itself in domestic politics.

In a statement at the end of the visit on April 15, the IMF mission said Lebanon's financial system had so far weathered the global financial crisis and shown a "remarkable resilience" to the global downturn.

The IMF has supported the country under an Emergency Post-conflict Assistance program since 2007. (Editing by Will Dunham)