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Lebanon Finance Minister: No Need for More Delay on Budget

Lebanon Finance Minister: No Need for More Delay on Budget

Tuesday, 21 May, 2019 - 10:45
Lebanese retired soldiers protest in front of the government building during a cabinet meeting to discuss an austerity budget, in Beirut, Lebanon, May 10, 2019. (AP)
Asharq Al-Awsat
Lebanese Finance Minister Ali Hassan Khalik stressed Tuesday there was no need for more delay or talks over the 2019 draft budget, including spending cuts which the cabinet has met daily to finalize.

"For me, the budget is done ... I have presented all the numbers in their final form," he tweeted.

Foreign Minister Jebran Bassil, however, suggested the debate may go on. "The budget is done when it's done," he told reporters.

The cabinet agreed on Monday most items in a budget that it says will reduce the deficit to 7.6% of GDP partly by delaying retirement and limiting benefits for state employees.

Last year, the deficit was higher than budgeted at 11.2% of GDP. Lebanon has one of the world's heaviest public debt burdens at around 150% of GDP.

President Michel Aoun has urged Lebanese to make sacrifices to rescue the country from financial crisis.

A copy of the draft budget distributed by the Finance Ministry included delaying retirement with a full pension for most military ranks by five years.

It included limits on benefits paid to state employees so that they could not exceed 75% of the base salary and rules to stop a practice of government bodies paying staff a 13th month of salary as a bonus.

Individuals would not in future be able to receive both a government pension and a government salary at the same time.

All new hiring will be frozen for three years.

Government attempts to impose what Prime Minister Saad Hariri says would be most austere budget in its history have faced a string of protests and strikes by state workers and retired soldiers.

On Monday, veterans fearing cuts to their pensions and benefits burned tires outside the parliament building where the cabinet met, and police used water cannon to drive them back.

Khalil said on Saturday that the deficit reduction would include a saving of around 1 trillion Lebanese pounds ($663 million) in debt servicing costs.

He told Reuters the government aimed to reduce debt servicing costs by issuing treasury bonds at an interest rate of 1%.

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