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Hezbollah warns about IMF bailout package

Hezbollah believes that terms required by any IMF bailout package for Lebanon would spark “a popular revolution”, a senior official said on Tuesday, rejecting such a step and calling instead for a “national solution” to a deep economic crisis.

Lebanon is in the throes of an unprecedented economic crisis, the result of long-entrenched corruption and bad governance that have landed the state with one of the world’s heaviest public debt burdens.

Hezbollah, a heavily armed Shi’ite group which is backed by Iran and designated a terrorist organization by Washington, is one of the main backers of a new government that has sought technical but not financial aid from the International Monetary Fund.

Long-standing financial backer France said last week it was looking at options to support Lebanon, including through an IMF program if Beirut sought one.

Hezbollah MP Hassan Fadlallah told Reuters the group was against the type of terms typically imposed by the IMF as part of a bailout such as taxes, privatization, reducing the size of the public sector and halting subsidies.

“The position is not toward the Fund as an international financial institution but on the terms offered to Lebanon, because they will lead to a popular revolution,” he said.

“Our position is against this type of program and not against the Fund as an organization.”

Deputy Hezbollah leader Sheikh Naim Qassem last week said the group was against allowing the IMF to manage the financial crisis, describing the Fund as a U.S. tool to which Lebanon would not submit.

Fadlallah said Lebanon needed a deeply-rooted reform plan that would “benefit from the experience of the IMF and others”.

France and other countries that have provided Lebanon with financial backing in the past say it must implement long-delayed economic reforms before any support is forthcoming this time.

Based mainly on previous IMF recommendations, any program from the Fund is likely to require Lebanon to agree to measures ranging from increasing taxes to fighting corruption.

Source: Reuters

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