Lebanon cabinet has approved a financial recovery plan

Two ministerial sources told Reuters on Friday that the cabinet of Lebanon has approved an economic recovery plan to take the country out of a three-year financial crisis.

Ministers agreed on the plan at the cabinet’s final session before relinquishing decision-making authority following the election of a new parliament on May 15 that will name a new prime minister.

The proposal contains key steps that are required for an IMF bailout, such as restructuring the banking system and amending the financial secrecy legislation.

Lebanon struck a preliminary agreement with the IMF in April, outlining a number of prior acts that the fund stated were required before reaching a comprehensive accord.

The Association of Banks in Lebanon (ABL) rejected a draught government recovery plan in late April, claiming that it would leave banks and depositors footing the “majority” of a $72 billion deficit in the financial system.

A request for comment on Friday’s events was not immediately returned by an ABL spokeswoman.

For decades, Lebanon’s banks have been key lenders to the government, helping to sustain a wasteful and corrupt state that teetered on a financial collapse in 2019.

Depositors have been locked out of their funds as the local currency has lost more than 90% of its value.

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