June 30, 2020 / 4:56 PM / 12 days ago

Lebanon's PM says rescue plan shows huge losses in financial system

FILE PHOTO: Lebanon's Prime Minister Hassan Diab speaks during a news conference at the government palace in Beirut, Lebanon May 21, 2020. Dalati Nohra/Handout via REUTERS

BEIRUT (Reuters) - Lebanon’s Prime Minister Hassan Diab said on Tuesday his government was committed to a financial rescue plan and the losses envisaged in it, saying it remained the basis of talks with the IMF.

Diab did not give a figure but the rescue plan agreed by the government after months of haggling portrays in depth how Lebanon came to pile up debts several times the size of its economy.

The government’s draft rescue plan has served as the cornerstone of the talks with the IMF and maps out massive losses in the financial system.

But the talks have been bogged down by a row between the government and the central bank over the scale of the losses and how they should be shared.

Alain Bifani, a senior member of Lebanon’s negotiating team with the IMF, resigned as finance ministry director general on Monday, saying vested interests were undermining the government’s economic recovery plan.

Bifani said the losses stood at $61 billion.

The Fund has said the government’s figures appear to be roughly the correct order of magnitude but that Beirut needs to reach a common understanding to move forward.

Reporting by Laila Bassam, Writing by Suleiman Al-Khalidi; Editing by Kevin Liffey and Gareth Jones

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