June 4, 2020 / 9:51 PM / a month ago

Lebanon aims to reconcile financial system loss figures next week

BEIRUT (Reuters) - Lebanon will agree next week on unified figures for losses in its financial system, the presidency said, seeking to reconcile different approaches taken by the government and central bank that have complicated negotiations with the International Monetary Fund.

FILE PHOTO: Lebanon's President Michel Aoun attends the cabinet meeting at the presidential palace in Baabda, Lebanon January 22, 2020. REUTERS/Mohamed Azakir/File Photo

The U.N. special coordinator for Lebanon, Jan Kubis, said last week the discrepancy between the government and central bank figures, along with other factors, “only weaken” the country’s position in the IMF talks which began last month.

Lebanon is grappling with a financial crisis seen as the biggest threat to its stability since the 1975-90 civil war.

After a meeting grouping the president, prime minister, finance minister and central bank governor, the presidency said an agreement was reached on the “necessity of unifying the numbers according to one approach”.

“A meeting will be held on Monday to decide on the numbers in order to facilitate the negotiations” with the IMF, it added.

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

Rice said he expected the discussions with Lebanon on IMF support to be lengthy due to the complex challenges the country faces and the need for comprehensive reforms and “strong government ownership of its economic program.”

A parliamentary sub-committee which has been seeking to help resolve the discrepancies on estimated losses will hold closed-door meetings with the central bank and government in the next few days to narrow the gap between the figures by Monday, according to Ibrahim Kanaan, a senior MP who chairs the panel.

A majority of parliamentary blocs backed an approach that deals with the losses gradually rather than in one shot, added Kanaan, who heads parliament’s budget and finance committee.

A government 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 and Tom Perry; Editing by Chizu Nomiyama, Mark Heinrich and Leslie Adler

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