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Interview, March 18, 2006

Lebanonwire

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Siniora to brief EU ministers on reform plans
by Rouba Kabbara and Henri Mamarbachi

BEIRUT - Lebanon's premier said Saturday that talks next week with EU foreign ministers will focus on the need for urgent economic reform, broader domestic political dialogue and better relations with former powerbroker Syria.

In an interview with AFP, Fuad Siniora said he "will underline ... Lebanon's desire for greater cooperation with the EU, our main trading partner, explain our program of political and economic reform and the intra-Lebanese dialogue" aimed at establishing "our sovereignty and our independence."

The talks are to take place on Monday in Brussels.

"I intend during this visit to Brussels to explain the plan of reforms that will allow Lebanon to adapt ever better to a changing world," Siniora said.

Lebanon's economy has still not fully recovered from the devastation of a 1975-1990 civil war, and the country is also suffering a political crisis that followed the February 2005 murder of former premier Rafiq Hariri.

"The reforms are necessary, because if we do not carry them out well today, then it will cost us even more in the future," Siniora said.

Lebanon's gross domestic product posted zero growth last year as a result of the political crisis, after surging five percent a year earlier, according to figures released this week by Audi Bank.

Siniora, however, said there was marginal growth of one percent, and the World Bank has put it at two percent.

At the same time, public debt stands at more than 38 billion dollars, or a whopping 185 percent of GDP.

Describing 2005 as one of the economy's "most critical years in a decade," the bank blamed the situation on Hariri's assassination, attacks that followed, and divisions among Lebanese on key questions.

Growth was hit by drops in building projects, port and airport activity and an 11-percent fall in tourist numbers in the wake of the Hariri murder and subsequent bomb attacks on other politicians and journalists.

An international conference grouping Lebanon, the European Union, the United States, United Nations, International Monetary Fund and Arab countries was to have been held at the end of last year.

It was postponed because of the political crisis that followed Hariri's murder and the April withdrawal of Syrian troops from the country.

"Despite this delay, I hope the conference can be held in the coming months," Siniora said.

Among the reforms envisioned are those that have been lying dormant since November 2000, when international donors pledged 4.4 billion dollars in aid to support fiscal adjustment and economic development projects. In turn, Lebanon committed itself to fiscal reforms and to privatisation of telecommunications, electricity and civil aviation.

But wrangling between billionaire tycoon Hariri, who was responsible for much of the post-war reconstruction and for the related ballooning of debt, and pro-Syrian President Emile Lahoud caused them to stall.

Hariri's killing soured relations with neighbouring Syria, which withdrew its troops from Lebanon last April after a near 30-year presence, and an ongoing UN probe into the crime has implicated officials from both countries.

The government has been virtually paralysed since December amid disagreement over the continuation in office of Lahoud, the presence of armed groups such as Shiite movement Hezbollah and relations with Syria.

But an ongoing cross-party dialogue aimed at resolving the political impasse will resume on Wednesday, following Siniora's return.

Referring to his program of reforms, Siniora said they should lead to the "opening up of Lebanon, (and) the role of the private sector in attracting investment and assuring economic growth."

Siniora's trip comes just ahead of the April 1 entry into force of an association agreement with the European Union, which will improve trade prospects with Europe.

The prime minister also said the accord will highlight Lebanon's position in the Arab world as "a model of openness and pluralism."

"We can be a good mediator between the Arab and Islamic worlds and Europe," he said, adding that the continuing Israeli-Palestinian conflict is at the center of disagreements between East and West.

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