Lebanon Needs to Reform or Risk Disappearing, France Says

(Bloomberg) --

Lebanon must carry out structural reforms if it wants to receive international aid -- or even survive, French Foreign Affairs Minister Jean-Yves Le Drian said, piling pressure on politicians to name a new premier.

“Lebanese authorities have the responsibility to set up a mission-driven government to ensure the implementation of essential reforms,” Le Drian said Thursday. “Otherwise, the international community will not be there, we will not sign a blank check.”

A massive blast earlier this month in the former French protectorate leveled the country’s main port in Beirut and killed more than 170 people, exacerbating Lebanon’s worst financial crisis in decades. Potential donors are concerned that assistance could either be siphoned off by a corrupt ruling class that has brought the country to economic ruin, or be funneled to Iran-backed Hezbollah militants.

Some $11 billion pledged at a 2018 conference hosted by France was never tapped because Lebanon failed to reassure the international community the money would be well spent.

There’s been little sign that the blast has galvanized Lebanese leaders into remedying their corrupt and mismanaged ruling system. Prime Minister Hassan Diab resigned, staying on in a caretaker capacity, but President Michel Aoun has yet to convene parliamentary consultations to name a replacement. Bailout talks with the International Monetary Fund that stalled before the explosion haven’t resumed because reform proposals have foundered amid disagreements.

French President Emmanuel Macron visited Beirut and met with officials shortly after the blast and said the country needed a new political pact. He urged politicians to form a new cabinet and hold early parliamentary elections.

Le Drian said essential reform measures include improving the public procurement process and reforming the banking industry.

“There is an emergency, a humanitarian emergency, a sanitary emergency, but also a political one if we want the country to hold on, because the risk today is that Lebanon disappears,” he said.

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