Lebanon’s cabinet yesterday approved a policy programme that aims to tackle one of the worst financial meltdowns in history, Reuters reports.
With Lebanon in the throes of economic collapse, three quarters of its population have descended into poverty and the local currency has lost 90 per cent of its value in the past two years.
New Prime Minister Najib Mikati’s government, formed one week ago after a year of political deadlock, met at the presidential palace to agree to the proposal, which will now be sent to parliament for a vote of confidence.
On Wednesday Reuters saw the draft document, which included a resumption of negotiations with the International Monetary Fund (IMF) and a restructuring of the banking sector.
An official source told the news agency the policy programme was agreed to without any major changes to the draft.
The Lebanese pound significantly strengthened against the dollar since the cabinet was formed, selling at around 13,800 to the US dollar yesterday at the street rate after having reached 23,000 to the dollar last month.
The draft programme had said the Mikati government would renew and develop the previous financial recovery plan, which set out a shortfall in the financial system of some $90 billion – a figure endorsed by the IMF.
Lebanon’s financial crisis was dubbed by the World Bank one of the worst depressions of modern history.
The scale of the losses was a main sticking point that brought down the plan last year when major political players and bankers disputed their scale and the talks were eventually abandoned last summer.
With the rate of deterioration in living conditions accelerating over the past year and shortages of basic goods such as fuel and medicine bringing life to a near standstill, some believe the gravity of the crisis could encourage politicians to pass decisions that were previously resisted.