Lebanese government enters caretaker mode calls to expedite economic recovery plan

The newly elected Lebanese parliament’s mandate begins on Sunday, amid warnings that any delay in the country’s economic recovery plan will be costly. The previous parliament’s tenure ended on Saturday.

According to the constitution, Najib Mikati’s cabinet is regarded to have resigned, according to Lebanese President Michel Aoun.

Aoun thanked the prime minister and ministers and asked the cabinet to operate as a caretaker until a new administration could be constituted.

The Cabinet had its final session on Friday, packed with last-minute choices, including the ratification of the economic recovery plan, despite opposition from Hezbollah and Amal movement ministers.

Mikati said: “Deposits of up to $100,000 will be fully protected,” stressing at the same time that there was “no economy without banks.”

The financial strategy in the plan includes a program to restore financial solvency “as a priority to enhance confidence in the state.”

In the medium and long term, it aims to put the debt on a regressive path through the introduction of gradual financial adjustments accompanied by permanent and strategic debt restructuring reforms.

The government also expects to cancel a large part of the Central Bank’s foreign currency obligations to commercial banks.

The Cabinet approved an increase in the telecommunications tariff, starting July, accompanied by the formation of a ministerial committee to review the remarks from the communications minister’s plan.

It did not approve the item related to the customs dollar after the finance minister withdrew it from the agenda “to avoid public anger.”

The Cabinet approved allocating $35 million for chronic diseases and cancer drugs, provided that the amount was secured by the Housing Bank in US dollars, which would be enough for four months.

Mikati warned: “Any delay in the recovery plan will have a high cost. Had we resolved this two years ago, the cost would have been much lower.”

He stressed that rescue opportunities were only available through the International Monetary Fund, and the Central Bank should set the necessary standards to ensure the growth of the economy.

He criticized the attempts of some to prioritize their interest over the public interest, indirectly finding fault in how the Free Patriotic Movement had handled the electricity crisis.

“I personally received two offers from companies willing to operate the Al-Zahrani and Deir Ammar plants to produce electricity on gas at excellent prices. A consulting office was assigned to study the two offers, but unfortunately, the minister of energy withdrew this item from the Cabinet’s agenda to be further discussed.”

The US State Department urged the elected MPs and political leaders to respond to the Lebanese people’s call for change and to work seriously and urgently to take the necessary measures to save the economy.

It called for the rapid formation of a government that was capable and committed to carrying out the serious work required to restore the confidence of the Lebanese people and the international community.

The elected parliament is meanwhile preparing to elect a speaker and deputy speaker.

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