Lebanon agrees on government's financial loss figures as `starting point', presidency says

BEIRUT, June 8 (Reuters) – Lebanon agreed on Monday that the government’s figures on losses in the financial system will form a “good starting point” for talks with the International Monetary Fund, the presidency said.

Discrepancies between the government and the central bank on estimated losses have complicated IMF talks, which began last month. President Michel Aoun’s office said last week that the country would provide unified figures by Monday, seeking to reconcile different approaches.

Differences arose because the government and the bank used different approaches to measuring the losses. The result was figures that aren’t comparable.

The heavily indebted state hopes to enlist the Fund’s help to climb out of its financial crisis, which is considered the biggest threat to Lebanon’s stability since its 1975-90 civil war.

IMF spokesman Gerry Rice said last week that fund staff view estimated losses in the Lebanese government’s plan as “broadly in the right order of magnitude, given the assumptions presented,” but more refinement of the estimates was needed.

The U.N. special coordinator for Lebanon, Jan Kubis, has said the differing figures, along with other factors, “only weaken” the country’s position in the IMF talks.

“The attendees agreed that the numbers in the government’s financial reform plan are a good starting point for continuing the negotiations,” Aoun’s office said on Monday after a meeting that of the prime minister, finance minister and central bank governor.

The government’s economic recovery plan sets out holes in the financial system, including $83 billion of projected losses in the banking system. The banking association, which rejected the government plan, subsequently has developed its own proposals. (Reporting by Ellen Francis, editing by Larry King)

Source: Read Full Article