End of IMF Negotiation Round in Beirut on the Financial Gap Law

The International Monetary Fund (IMF) mission concluded its series of intensive meetings in Lebanon today, held between the Ministry of Finance and Hotel Venice from September 15 to 18. The discussions involved financial, economic, and banking officials and institutions, as part of ongoing efforts to advance reforms and prepare for a Staff-Level Agreement (SLA).

At the conclusion of the sessions, today’s meeting served as a culmination of the discussions and was held at the Ministry of Finance, attended by Ministers of Finance and Economy and Trade Ammar al-Bassas, representatives from the Presidency and Government, Central Bank Governor Karim Saied, and relevant departments within the Ministry of Finance—including tax, public debt, budget, treasury, imports, customs, and real estate administrations—as well as representatives from concerned institutions and the IMF mission team led by its head Ernesto Riga and accompanying technical staff.

Following the meeting, Minister Jaber affirmed that the final session with the mission marked the completion of an extensive round of consultations that went beyond banking issues to cover all major aspects of the Lebanese economy, particularly the Ministry of Finance and related tax, public debt, and financial administration bodies, along with engagements with the private sector.

Jaber noted that discussions primarily focused on defining the required path for the Financial Gap Law, which is currently the most critical file. He stressed that addressing the banking crisis, now in its seventh year, can no longer be delayed, and that efforts are concentrated on finalizing the law in cooperation with the Parliament, supported by the President of the Republic, the Speaker of Parliament, and the Prime Minister, enabling the start of restoring depositors’ funds and re-establishing the banking sector’s role in serving the Lebanese economy.

Responding to a question, Jaber explained that the first phase of negotiations with the IMF involves reaching a Staff-Level Agreement, similar to the one achieved in 2022, but current conditions differ due to the presence of implementation steps and the enactment of reform laws. He added that passing the Financial Gap Law, alongside completing other financial files, could pave the way for a final financial agreement with the IMF, enhancing confidence in Lebanon and opening doors for greater international support and facilitations for the Central Bank.

On another query, Jaber confirmed that restoring depositors’ funds is contingent upon enacting the Financial Gap Law, noting that the Central Bank will play a central role in this process, with the government and relevant institutions ready to accompany and support it in reforming the banking sector, restoring deposits, and rebuilding trust.

Jaber denied any delay in addressing the file, clarifying that the government is simultaneously working on finalizing the 2027 budget, which is expected to be submitted to Parliament on October 2, potentially causing minor delays in discussing the Financial Gap Law—without altering the overall direction toward its enactment.

Regarding depositors’ demands and the timeline for resolving their situation, Jaber affirmed that work continues on this file, with preparations, laws, and reform measures advancing in coordination with international institutions, stressing the need to achieve tangible results capable of resolving a crisis that has persisted for seven years.

Jaber highlighted that despite difficult circumstances, Lebanon has managed to maintain financial and monetary stability through cooperation among its institutions, noting that the adoption of the Banking Sector Restructuring Law sent a strong reform signal that was positively received internationally.

He revealed a new milestone to be completed this month in Washington, where he will join the Prime Minister in meetings with the IMF Managing Director and the World Bank President, along with additional consultations, aimed at strengthening the negotiation track and reaching an agreement with the IMF as quickly as possible.