Siniora upbeat about early benefits of ‘Paris
II’
Minister says markets already positive Elie Hourani
Daily Star staff
Finance Minister Fouad Siniora on Thursday said that
“Paris II” had already reflected positively on the local markets and predicted a
gradual drop in interest rates in the next few weeks.
Speaking to a group of Finance Ministry employees, who were gathered at the Finance
Training Institute, the minister said that the Paris II conference “has succeeded
without any help from the International Monetary Fund and without making any political
pledges.”
He said the funds received by Lebanon did not represent any new debts for the Lebanese
Treasury to meet. The net result of the conference was to swap high interest short-term
debts for low interest long term loans.
Siniora said the Paris II success was due to several factors.
One factor was the economic and financial reforms achieved by this country and the
lowering of the budget deficit. This earned Lebanon praise from international financial
authorities, the minister said.
Another factor was that the whole world had understood that Lebanon, which was an example
of moderation in this part of the world and was also marked by its liberal and democratic
system, should not be allowed to slip into economic and political chaos.
A third factor was the impact of regional tension.
A fourth factor was the reconciliation among the country’s three political leaders
and the individual effort made by each of them for the success of such measures as the
value-added tax and the re-organization of the Customs Department.
Siniora paid special tribute to Prime Minister Rafik Hariri for the “huge effort he
made” for the success of the conference.
Siniora underlined the importance of lowering the budget deficit and explained that the
cost of debt servicing in the 2003 budget was LL4,000 billion.
“This means that debt servicing was bleeding most of the state’s revenues,”
Siniora said.
He lashed out at some of his critics, including former Premier Salim Hoss who boiled Paris
II down to a 6 or 7 percent drop in the national debt. He said “such an opinion was
based on one part only of the (economic and financial) picture, not all of it.”
Meanwhile, Central Bank Governor Riad Salameh on Thursday said that Lebanon was under no
financial trusteeship or terms on the part of the International Monetary Fund. He said the
IMF was now adopting a wait-and-see attitude with regard to financial measures taken by
this country’s government.
Speaking during an interview with the LBC TV station, Salameh said that Paris II was a
good start. But it was “imperative to fully implement the government’s financial
plan based on the budget projection, privatization and the issue of Treasury bills.”
The governor pointed out that what Lebanon has received from Paris II was several 15-year
loans at low interest “which has not yet been stated.” He added that it was up
to the donor countries to state the interest. But he predicted that the interest
“would not go beyond 5 percent.”
Copyright©Daily Star |
