Sahar Houri – The Daily Star
Prime Minister Saad Hariri chaired a financial meeting Thursday night paving the way for a smooth Parliament session next week aimed at endorsing the draft 2019 state budget. “The meeting went very well. There will be another meeting Friday at 6 p.m.,” a source that was involved in the evening session told The Daily Star.
“The meeting focused on the 2019 draft budget in light of the amendments introduced by Parliament’s Finance and Budget Committee, in anticipation of the debate in Parliament next week,” a statement from Hariri’s office said.
Asked how the meeting went, Finance Minister Ali Hasan Khalil told The Daily Star that there was an agreement among ministers not to publicize the minutes of the meeting.
Hariri headed the meeting at the Grand Serail, which included Khalil, other ministers and the head of Parliament’s Finance and Budget Commitee. According to MP Ibrahim Kanaan, who heads the committee, there was a reduction in the draft 2019 state budget’s deficit to 6.59 percent of GDP, down from 7.59 in the draft approved by Cabinet.
Earlier in the day, a televised news conference, Kanaan said that spending was brought down by over LL550 billion ($360 million) in the version the committee approved Tuesday. He added that all the revenue-generating measures in the draft that the committee had voted down had been replaced by others.
The state is under intense pressure to bring down spiraling costs, which resulted in a deficit of 11.1 percent of GDP last year. Perennial deficits have contributed to an $86 billion public debt, which at around 150 percent of GDP makes Lebanon the third-most-indebted country in the world. As the costs of servicing this debt burden have risen, so have questions about the country’s ability to continue paying them. To help solve this problem, politicians have attempted to slash spending and raise revenues in the draft 2019 budget.
The bill is set to go before the full Parliament Tuesday, Wednesday and Thursday of next week.
During the news conference, Kanaan criticized the delay in Cabinet’s submission of the budget to the committee. “There is no negligence by the committee, but because [the budget] was delayed by Cabinet for seven months after its constitutional deadline,” he said.
Article 83 of the Constitution calls on Cabinet to submit the following year’s state budget to Parliament in October.
Cabinet approved the budget and sent it to Parliament in May after it was held up by a 254-day Cabinet void that ended in January.
Kanaan called on Cabinet to finish the draft 2020 state budget and pass it on without any delays, so that it can reach Parliament in line with the constitutional timeline.
Hariri also issued a circular Thursday calling all public administrations that failed to submit their 2020 budget requests to the Finance Ministry to do so before Aug. 1. The finance minister had issued a similar circular in May.
Separately, Lebanese Forces leader Samir Geagea criticized the draft 2019 state budget, saying it did not reflect the country’s need to effectively reduce spending.
The LF added that it “would not produce the desired results” and that some of the most crucial reforms had not been accepted.
During a news conference, he said that the budget was created “as if the economic situation in Lebanon were stable and normal,” and that it would not be enough to address the country’s dire finances.
Geagea listed four cost-cutting measures that he considered essential to repairing state finances: reigning in illegal smuggling; addressing violations in the Lebanese Customs; clamping down on tax evasion; and ensuring state institutions such as the port and Electricite du Liban provide revenue rather than suck funds out of the Treasury.
Cabinet spent weeks discussing the draft budget before endorsing it and passing it on to Parliament. Its approval was held up by ministers’ disagreement over the type of measures it contained to reduce state spending. Geagea said that despite efforts by LF ministers to “raise their voices” to oppose ineffective articles in the draft budget, their calls were ignored.