Brussels, 10/12/2007 (Agence Europe) - On Monday 10 December, the European Union approved €80 million in macro-financial assistance (MFA) to Lebanon. Thisl: e
assistance to the balance of payments will support Lebanon's economic and social programme for reconstruction and development, notably through a contribution to reduce Lebanon's high stock of public debt and strengthen its fiscal policy. The macro financial assistance will also facilitate and encourage progress in the implementation of the EU-Lebanon European Neighbourhood Policy Action Plan, said the Commission in a press release.
The macro-financial assistance consists of €50 million in loans and €30 million in grants. Disbursement of the assistance will be subject to progress being made in the implementation of the Emergency Post-Conflict Arrangement with the International monetary Fund (IMF) and of structural and social reforms aiming at fiscal sustainability and poverty reduction. The MFA agreed by the EU Council of ministers is a concrete expression of the EU assistance pledged at the Paris Conference in support for Lebanon earlier this year. It complements financing from the European Neighbourhood and Partnership Instrument and from the European Investment Bank (EIB). At the High-Level Donors' Conference in Support to Lebanon (Paris III), in Paris on 25 January 2007, the European Commission announced a package of approximately €500 million for the period 2006-2010, comprising about €300 million in grants under various instruments, €80 million in macro-financial assistance and €120-130 million in EIB loans leveraged by EC interest rate subsidies.
“This MFA is … a sign of the resilience of the Lebanese institutions and of the Lebanese government's solid commitment to improve its fiscal consolidation and reform its economy, despite the ongoing political instability,” said European Economic and Monetary Affairs Commissioner Joaquin Almunia. His counterpart in External relations Benita Ferrero-Waldner said that “it is now crucial for the Lebanese to come to an agreement and elect a President”. She welcomed “the first steps which indicate that a solution could be reached in the not too far future”. “We continue to be ready to support the political reform process in Lebanon especially through the European Neighbourhood Policy,” she added. (O.L.)