Lebanon bailout depends on widespread reforms, says Macron

French president says end to graft and new era of transparency required to persuade financial donors

French president Emmanuel Macron  and French health minister Olivier Veran   with Arnaud Tranchant, commander of the Tonnerre helicopter carrier, off the port of Beirut. Photograph:  Stephane Lemouton/AFP/Getty  Images

French president Emmanuel Macron and French health minister Olivier Veran with Arnaud Tranchant, commander of the Tonnerre helicopter carrier, off the port of Beirut. Photograph: Stephane Lemouton/AFP/Getty Images

 

Emmanuel Macron has pledged to host another aid conference to support Lebanon during a follow-up visit to blast-ravaged Beirut, in which he cautiously backed the new prime minister, but made any French bailout conditional on a cabinet that implements widespread reforms.

The French president’s return to Lebanon, nearly one month after his last visit in the wake of the huge explosion that destroyed swathes of its capital, was seen by local officials as a sign that a financial package they had been pleading for was edging closer.

However, Mr Macron insisted that only an end to entrenched graft and a new era of transparency could shift his thinking and that of other donors.

In a flurry of activity ahead of his arrival on Monday, parliamentarians chose Mustapha Adib as the new prime minister, and spoke about constitutional reforms that would put Lebanon on more of a civil footing. The caretaker finance minister also commissioned an audit of the central bank – a key demand of the International Monetary Fund, whose call for reforms had been stonewalled by Lebanese negotiators before the blast.

Mr Macron said the central bank had been a key focus of French efforts to understand the scale of Lebanon’s financial crisis, which had led the country to the point of total collapse before the port explosion.

“We want to know the real numbers of the Lebanese banking system and call for auditing,” he said.

The French leader said the next six weeks, before an aid conference in Paris that he slated for mid to late October, were vital to the future of Lebanon, which has reeled from one crisis to the other for the past year, in which its currency has plunged in value by 80 per cent, poverty and unemployment have soared, banks have imposed capital controls and a catastrophic explosion forced tens of thousands from their homes.

The spectre of a French leader making demands of a former protectorate, 100 years to the day after Paris proclaimed the birth of Greater Lebanon, sat uncomfortably with some Lebanese.

“I know that they’re the only heavyweight country to take an interest,” said Jihane Boutros, an out-of-work retailer. “But we have to make sure their benefit aligns with ours.”

Others were more sanguine.

“I don’t care that he’s here, it’s a good thing,” said Naim Haddad, a Beirut cafe worker. “He’s been to the port twice. Our president hasn’t been once! Let’s not pretend that the leaders who got us into this mess can be trusted to get us out of it.”

Unifying figures

Mr Macron has attempted to change the optics of his visit from cajoling a reluctant working-class to focusing on unifying figures – such as the legendary diva, Fairuz, whom he met in her home on Monday night – and emblems such as the native cedar tree, one of which he planted to mark the foundation of the modern state.

However, discussions with leaders are tightly focused on a timetable for structural change and means to implement them. French support for the new prime minister – so low-profile that some Lebanese parliamentarians had to Google him before voting for him – has raised concerns that financial aid may be released in return for the bare minimum of progress.

Meanwhile, estimates of damage from the port explosion have risen to €3.8 billion. An investigation into the cause of the blast, now into its third week, is focusing on dockside officials and has yet to reach senior politicians, whose appointees were instrumental in the decision to keep more than 2,000 tonnes of ammonium nitrate stored in a warehouse there for more than six years.

An investigating judge ordered the arrest of a further five people in connection with the investigation on Tuesday. Meanwhile, Mr Adib toured the badly hit district of Gemmayze on Monday night, the first Lebanese official to do so since the cataclysmic blast that killed nearly 200 people and wounded 6,000 more. – Guardian