Lebanon under pressure to pass key financial reforms—What are the IMF's conditions?
As Lebanon braces for the upcoming International Monetary Fund (IMF) Spring Meetings in Washington on April 21, pressure is mounting on the government and parliament to finalize crucial financial legislation.
A visiting IMF delegation delivered a clear message to Lebanese officials: no dollar in foreign aid will reach Lebanon without compliance with the fund's conditions. These include the government's appointment of a new board for the Council for Development and Reconstruction and Parliament's approval of two long-stalled financial reform laws.
The first law involves amendments to Lebanon's banking secrecy legislation. It has already been referred to Parliament and forwarded by Parliament Speaker Nabih Berri to the joint committees, which are set to begin discussions this coming Wednesday.
The bank restructuring and regulation law is the second—and more complex—law. The government failed to pass it in Tuesday's most recent Cabinet session. Ministers have been asked to submit written feedback to the Finance Ministry's expert committee that drafted the law, hoping to finalize it by the end of the week.
This legislation outlines how banks will be evaluated—identifying which can recapitalize and continue operating, and which will be liquidated. Its implementation is closely tied to a third law: the Financial Gap Law, which will determine the size of banking sector losses and the mechanism for returning deposits.
However, the IMF does not require this third bill before the April 21 deadline.
Still, several Cabinet ministers have expressed reservations, particularly over moving forward without a clear calculation of the financial gap, warning that any change in loss estimates could upend the restructuring strategy.
Concerns have also been raised about a provision stipulating that deposits in banks slated for liquidation be transferred to the Deposit Guarantee Institution, which currently only guarantees deposits up to LBP 75 million—around $830 at current rates.
Even if the Cabinet manages to approve the restructuring bill by the end of the week, Parliament will be left with just two days to review and pass both laws before the IMF meetings. With that narrow timeline, lawmakers and observers are questioning whether the process can be completed in time.
As doubts grow over whether Parliament can move fast enough, questions are resurfacing: Will opponents of the IMF deal attempt to derail these laws—and with them, Lebanon's last viable path to a financial rescue?
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