'Lebanon urgently needs a government that will finally halt the spiral of economic and financial collapse and initiate vital reforms. As soon as this happens, we will step up our support.'
In recent weeks we have had to confront numerous open crises: Russian manoeuvres causing alarm at Ukraine’s borders, violent clashes between Israel and Hamas and the scandalous forced landing of a European aircraft in Belarus... We must of course continuously respond to these types of emergency.
However, we must tackle these crises which, although they are not on the front pages of European newspapers, could turn into open crises if they are allowed to deteriorate. This is particularly true of the serious crisis that Lebanon has been experiencing for more than a year. It has already created a dire situation for the people directly impacted, and threatens to destabilise the region and affect the EU. I travelled to the country on 19 and 20 June to try to contribute to alleviating the crisis. We then discussed the issue at the Foreign Affairs Council on Monday 21 June.
We all remember: on 4 August 2020 large parts of the city of Beirut were destroyed by a huge explosion in its port. This disaster occurred during a protracted economic, social and political crisis caused by serious shortcomings on the part of the Lebanese state. These long-standing problems had been exacerbated by the consequences of the Syrian crisis: the estimated 1.5 million refugees who have arrived from Syria since 2011 now make up almost a quarter of Lebanon's population (and a total of 40% of the country's residents are not Lebanese citizens). In 2020 the COVID-19 outbreak compounded this situation.
Over the past 10 years, however, the EU has provided a great deal of support to Lebanon. To this end, between 2011 and 2020 we made available EUR 2.4 billion, EUR 340 million of which was mobilised in response to the COVID-19 outbreak, to which was added EUR 170 million following the explosion in the Port of Beirut. Following the explosion, we established the Lebanon Reform, Recovery and Reconstruction Framework (3RF) together with the UN and the World Bank, which allows us to help the Lebanese people directly.
However, Lebanon has continued on the path to economic and financial collapse. Despite continued calls by the EU and the international community, the negotiations to form a new government, which have been ongoing for months now, are stalled. Although the sectarian system underlying the division of powers in Lebanon has clearly reached its limits, it remains very difficult to replace.
Consequently, the country has been led by an interim government for ten months. This government is serious about tackling the country's difficulties and has proposed solutions. But it has neither the support of Lebanon's Parliament, nor a mandate to undertake reforms. As a result, no tangible progress has been made, either on the emergency measures needed to obtain the assistance from the International Monetary Fund (IMF) which will be vital to halt the spiral of collapse, or on the more structural reforms necessary to combat corruption, increase the independence of the judiciary, clarify public procurement rules, and provide a framework as to how the Central Bank should operate or regulate key sectors such as electricity. In September 2020, following his exchanges with Lebanese leaders, France's President Emmanuel Macron proposed a programme of reforms with short implementation deadlines. This programme remains valid and should constitute the roadmap for any new government.
The Lebanese people have suffered greatly as a result of this failure: 55% of the population live below the poverty line. According to the IMF, Lebanon is expected to be the only economy in the region to contract further this year, despite an unemployment rate that already stood at an estimated 39% at the end of 2020. In recent months, the Lebanese pound has lost 90% of its value against the US dollar Many educated Lebanese are leaving the country, and poverty is increasing. These conditions have heightened social tensions. Protests against the devaluation of the Lebanese pound and the deterioration of living conditions regularly break out across the country.
The worsening socio-economic situation could have serious consequences for stability and security in the country, which was the scene of a lengthy civil war between 1975 and 1990 and still experiences regular outbreaks of violence. On 4 February 2021, the prominent Lebanese intellectual and critic of Hezbollah Lokman Slim was found dead, raising fears of a return to the days of political killings in Lebanon. Then, in March this year, the Commander-in-Chief of the Lebanese Armed Forces warned that the army should not allow itself to be drawn into the political stalemate. He was more concerned about the risk posed by internal conflict to Lebanon's security than conflict with Israel or Syria.
I therefore travelled to Lebanon on the weekend of 19 and 20 June and met with President Aoun, Speaker of Parliament Berri, interim Prime Minister Diab, Prime Minister-designate Hariri, Deputy Prime Minister, Minister of Defence and interim Minister for Foreign Affairs Akar, Head of Security General Ibrahim, Commander-in-Chief of the Army Aoun as well as public figures and independent experts.
I conveyed our concerns to them. Because of the current crisis, neither the Gulf states nor the Lebanese diaspora will be riding to the country’s financial rescue this time. I reminded the Lebanese leaders of the significant support we were already providing to the country and indicated that we were ready to step up this support but that, before this could happen, Lebanon needed a government that struck an agreement with the IMF and reformed the country.
Everyone I spoke to told me that they were in favour of such an agreement and a judicial investigation into the workings of the Central Bank. As urgent as this agreement with the IMF is, it has proven difficult to finalise, because the reforms required will inevitably call into question the distribution of economic power and advantages in Lebanon. However, there is no other way to avoid the collapse of the country. We must therefore insist on this point; however, we must also be ready to assist Lebanon further once an agreement with the IMF has been concluded.
I also informed my hosts that if Lebanon's leaders do not fulfil their responsibilities, we would have to consider alternative measures. Certain Member States have raised the possibility of our adopting targeted sanctions. None of the leaders to whom I spoke were opposed to this idea. Some even declared that they were in favour of sanctions, provided of course that they were imposed on the real ‘culprits’. The Lebanese public figures I spoke to all told me that the potential use of sanctions was essential in order to exert pressure on political leaders.
We took stock of my visit at the Foreign Affairs Council on 21 June and we will continue to work on the criteria that could form the basis of our triggering possible targeted sanctions. Nonetheless, the threat of sanctions will not suffice if we want to avoid the collapse of the country and help to bring about genuine change in Lebanon.
We must also monitor the illegal financial flows out of the country more closely, and put in place the instruments at our disposal to more effectively combat money laundering originating in Lebanon. We must also begin to help Lebanon to prepare for next year’s local, parliamentary and presidential elections. I insisted that they should take place in 2022, as scheduled. They offer a real opportunity for change, but there must be a level playing field. We should consider the possibility of sending EU observers.
In Lebanon, real change will take time. Our commitment and our support should encourage such change. In the immediate future, we must make it a priority to maintain pressure on the Lebanese leadership to ensure that they fulfil their responsibilities. The EU has been and remains in full solidarity with the Lebanese people during this difficult time. However, to maintain this pressure, we must only provide support to the government once reforms are under way. In the coming months, Lebanon will remain one of the main priorities of the EU’s external policy.