BEIRUT/LONDON: Hezbollah is against allowing the International Monetary Fund to manage Lebanon’s financial crisis, the powerful group said on Tuesday, indicating opposition to any IMF bailout that would impose tough conditions on the heavily indebted state.
Hezbollah, backed by Iran and designated as a terrorist group by the United States, is one of the main parties that backs the new Beirut government as it struggles with the unprecedented crisis.
Facing a huge public debt burden and a liquidity crunch, the government on Tuesday appointed international investment firm Lazard and law firm Cleary Gottlieb Steen & Hamilton LLP as its financial and legal advisers on a widely expected sovereign debt restructuring.
Beirut has sought IMF technical but not financial aid.
“We will not accept submitting to (imperialist) tools ... meaning we do not accept submitting to the International Monetary Fund to manage the crisis,” said Hezbollah’s Sheikh Naim Qassem, deputy leader of the heavily armed Shiite group.
“Yes, there is nothing to prevent consultations ... and this is what the Lebanese government is doing.”
An IMF technical team visited Beirut from Feb. 20-24. “The discussions on the challenges and the authorities’ plans to address them were very informative and productive,” IMF spokesman Gerry Rice said.
“Staff is available to provide further technical advice to the government as it formulates its economic reform plans.”
The crisis came to a head last year as capital inflows slowed and protests erupted against the ruling elite over corruption and bad governance — root causes of the crisis.
Banks are imposing tight restrictions on access to deposits and transfers. The Lebanese pound has slumped: dollars were being offered at 2,470 pounds on Tuesday, a dealer said. The official rate is 1,507.5.
“Hezbollah is very adamantly opposed to the IMF and that makes it very, very difficult and means Lebanon will have to get to a point where the situation is bad for longer,” said Steffen Reichold, portfolio manager at Stone Harbor Investment Partners, which holds some Lebanese Eurobonds.
“That could mean the exchange rate getting to 3,000 and significantly more inflation.”
French Finance Minister Bruno Le Maire said on Monday his government was looking at options to help Lebanon recover, including an IMF program if Beirut seeks one.
Foreign states which have backed Lebanon in the past want to see implementation of long-delayed reforms before any assistance is forthcoming this time.
Some of Lebanon’s Eurobonds intensified their sell-off.
The government must urgently decide how to handle a $1.2 billion Eurobond maturing on March 9.
“It’s pretty likely they will go down the debt restructuring route and the question then becomes will the March 2020 bonds be brought in to that,” said Nick Eisinger, principal, fixed income emerging markets, at Vanguard.
“I think the market will not be particularly happy that the IMF will not be coming on board with a financial program as without that the recovery prospects and long-term recovery of the country are not good,” he said.
Hezbollah says it opposes IMF management of Lebanon crisis
https://arab.news/j9763
Hezbollah says it opposes IMF management of Lebanon crisis
- Iran-backed group's opposition to IMF makes managing Lebanon's situation "very, very difficult"
- Lebanon's financial crisis continues to deepen, exacerbated by civil protests
Egypt receives €1bn from EU as reward for economic reforms progress
- Payment is the 2nd installment of a €5bn macro-financial assistance loan package agreed in 2024
- European Commission President Ursula von der Leyen says it reflects Cairo’s efforts to build a stronger economy
LONDON: Egypt received €1 billion ($1.16 billion) from the EU on Thursday. The payment, designed to help boost the country’s financial stability, is part of a €5 billion macro-financial assistance package agreed in 2024.
The transfer was made after Egypt implemented a range of economic reforms, including improvements to public financial management and the foreign exchange market, the European Commission said.
The money is intended to help Egypt cover part of its financing needs, ensure economic stability, and support the country's economic reform agenda.
The €5 billion in macro-financial assistance, part of a broader €7.4 billion package, comes in the form of concessional loans that Egypt will have 35 years to repay. Thursday’s payment was the second, after an initial €1 billion was disbursed in December 2024. The remaining €3 billion is expected to be paid in two further installments this year.
Rania Al-Mashat, Egypt’s minister of planning, economic development and international cooperation, said the funding reflected the depth of Egyptian-European relations.
The financing package is directly linked to Egypt’s program of reforms designed to unlock the country’s economic potential, she added.
European Commission President Ursula von der Leyen said the latest payment “shows both the EU’s commitment to this partnership and Egypt’s efforts to build a stronger and greener economy.”
The commission said Egypt had fulfilled all the required conditions for the disbursement of funds, including that it remains on track with the requirements of an International Monetary Fund program. The IMF last month said it had reached an agreement with Egypt for reviews of that program, which could unlock about $2.5 billion.
Egypt secured an expanded $8 billion IMF package in March 2024, contingent on the country carrying out economic reforms.
The Egyptian economy has stabilized following a financial crisis in 2023 and 2024 that led to the devaluation of the Egyptian pound, a severe shortage of foreign exchange, and record-high inflation.
