The agreement in principle – a first step on what will certainly be a long and complicated road – offers a glimmer of hope to the small Mediterranean country in the grip of a devastating economic crisis. The World Bank has described the economic crisis as one of the worst the world has seen in more than 150 years.
The IMF said in a statement that the Lebanese authorities and the IMF team which has been in Lebanon for two weeks have reached “a staff-level agreement on comprehensive economic policies” which could be supported by a fund agreement. extended 46 months, or EFF, with requested access to approximately $3 billion.
The IMF statement indicates that the Lebanese authorities, with the support of IMF staff, have formulated a comprehensive economic reform program aimed at rebuilding the economy, restoring financial viability, strengthening governance and transparency, removing barriers to job-creating growth and increased social and reconstruction spending.
This is a first step on the way to an IMF bailout in Lebanon. For that to happen, Lebanon would need to implement reforms, including drafting a capital control law, restructuring the country’s banking sector, and amending decades-old bank secrecy laws.
“The crisis requires a comprehensive reform program,” Mikati said, in order to face the challenges ahead and achieve “financial and economic stability and achieve permanent and strong growth.”