Lebanon will lose aid grant without financial reform, EU says
The EU will not issue 500 million euros of aid to Lebanon unless the nation restructures its banking system, according to a leading EU official, The New Arab via AFP reported on February 21st.
In 2024, in a bid to lessen the influx of refugees into Europe, the EU pledged one billion euros of funding to Lebanon. While half of the funding was paid out in late August, while visiting Lebanon, EU Commissioner for the Mediterranean Dubravka Suica warned that the rest will be subject to “some conditions.”
After meeting Lebanese President Joseph Aoun, Suica said: “The main precondition is the restructure of the banking sector… and a good agreement with the International Monetary Fund.”
International financial institutions and Western nations have long required the government to implement extensive economic reforms, including reorganising the banking industry, in order to qualify for rescue packages.
In 2022, the International Monetary Fund (IMF), reached a draft agreement with Lebanon. However, after failing to deliver economic reforms, the nation didn’t receive the financial aid.
The country’s new government, led by Prime Minister Nawaf Salam, was formed following over two years of political deadlock. According to a report earlier last week, Lebanon’s government said it is planning to return to the IMF for a loan and a pledge to recapitalise the country’s banks.
The New Arab
