Date: May 25, 2019 Source: The Daily Star ‘Thank God we’re done’: Formal OK of budget awaits Hussein Dakroub| The Daily Star BEIRUT: The Cabinet Friday wrapped up marathon discussions on a draft austerity budget by approving all articles and figures in the 2019 fiscal plan that reduced the projected deficit-to-GDP ratio to 7.5 percent from 11.5 percent last year, Information Minister Jamal Jarrah said. Despite reservations voiced by Lebanese Forces ministers over some items in the draft budget containing for the first time a string of austerity measures and key fiscal and economic reforms to cut the deficit, Friday’s move will be followed by a Cabinet session at Baabda Palace to be chaired by President Michel Aoun to endorse the draft before sending it to Parliament for study and final ratification. “Mabrouk. Thank God, we are done with the budget. Today [Friday] we finished discussing the articles and figures of the 2019 budget. ... We finished approving all articles and figures. We reduced the deficit to 7.5 percent,” Jarrah told reporters after the Cabinet session chaired by Prime Minister Saad Hariri at the Grand Serail. He said a Cabinet session would be held at Baabda Palace, at a date to be set later, to formally endorse the draft. This likely brings to a close more than three weeks of near daily sessions on the budget. A Baabda Palace source told The Daily Star a Cabinet session at the presidential palace to endorse the 2019 budget would be held either Monday or Tuesday. It was not immediately known whether a proposal for a 50 percent cut in the salaries and remunerations of the president, the prime minister, ministers and current and former MPs was included. Friday’s was the 19th session in a series of Cabinet meetings that began on April 30 dedicated to examining the draft budget, which seeks to cut state spending and generate revenue in order to slash the deficit. Speaking at the start of the session, Hariri rejected critics’ claims that the draft budget did not contain an economic vision. “‘I want to consider this matter mere talk because the economic, developmental and investment vision is included in the [government’s] policy statement, the CEDRE conference and the McKinsey plan. Financial reforms will happen over five years,’” Hariri said, according to Jarrah. “‘We have to stop such talk and concentrate on our work and on finishing the budget and sending it to Parliament,’” Hariri added. He was referring to the U.S.-based consultancy firm McKinsey & Company, which last year presented the Lebanese government with a wide-ranging, five-year plan to diversify and modernize the productive sectors of Lebanon’s economy.Hariri acknowledged that the delay in the government formation and in passing the 2019 draft budget was costly for the country. Taking in an indirect swipe at Foreign Minister Gebran Bassil, who had been blamed by Finance Minister Ali Hasan Khalil and other ministers for delaying the endorsement of the budget by presenting last-minute proposals to cut the deficit, Hariri, according to Jarrah, said: “‘We are at the threshold of preparing the 2020 budget, and I have too a set of proposals. “‘If it is required to keep going around and drowning in the 2019 figures, there is no objection. But people should know that the deficit reduction we have reached is very important, from 11.5 percent [last year] to 7.5 percent. This is not small. We must rely on God to finish the 2019 budget.’” Jarrah said that Hariri informed the Cabinet that he would be leaving early next week for Saudi Arabia to represent Lebanon at the Arab and Islamic summits to be held there before Eid al-Fitr, which marks the end of the holy Muslim fasting month of Ramadan. Asked how Bassil was convinced, although he said earlier he did not mind if the budget discussions took more time as long as the necessary proposals were introduced, Jarrah said: “Some suggestions that were raised earlier were discussed again today [Friday]. We approved some articles and added them to the budget, and there are articles we did not approve nor add to the budget.” He refused to give details on the items that were not approved. Bassil, the head of the Free Patriotic Movement, did not speak to reporters after the session. He said Thursday his proposals aimed to reduce the budget deficit further than the existing draft, which he has described as “insufficient.” Asked if Bassil’s proposals did not secure the necessary revenues, Jarrah said: “There are proposals that secured revenues and others that reduced expenditures and we worked on increasing revenues and reducing expenditures. For example, when we reached a deficit ratio of 7.68 percent , [Interior] Minister Raya El Hassan proposed the issue of public cars plates, thus reducing the deficit to 7.5 percent. “This means there are proposals that reduced the deficit and others that increased revenues until we reached this result.” On whether all ministers approved the draft budget or was there a possibility of amending it at the Baabda session, Jarrah said: “We approved the budget figures and articles. “The economic debate and the discussions on suggestions that may increase revenues, control expenditures or reduce the deficit are ongoing because we will start the 2020 budget. If there is something good and serious that helps in reducing the deficit, the Cabinet can take a decision, or send a draft law to Parliament, or prepare a decree.” Asked why didn’t Hariri talk to journalists at the end of Friday’s session as was widely expected, in order to brief them on the budget provisions, Jarrah said the prime minister adjourned the session “because he had a very important appointment.” He was referring to Hariri’s meeting with a top adviser to French President Emmanuel Macron, Aurelien Lechevallier, with whom he discussed bilateral relations and reforms Lebanon pledged to carry out during last year’s CEDRE conference, held in Paris. Speaking to reporters after the session, Minister of State for Administrative Development May Chidiac, one of four ministers representing the Lebanese Forces, said there were some points she and her fellow LF ministers did not approve of. “There are issues that have been transferred to the Cabinet session at Baabda Palace. It doesn’t seem to be that things will end smoothly,” she said, without elaborating. Deputy Prime Minister Ghassan Hasbani, one of the four LF ministers, said Thursday the draft budget would stabilize Lebanon’s financial situation, but fell short of the major structural reforms it needed. Asked to comment on the LF’s reservations, Khalil told reporters after the session: “We did not hear reservations, neither over the [budget] articles, nor over the figures. Everyone approved the budget.” “Agreement [on the budget] was reached by everyone. Prime Minister Saad Hariri decided that the final meeting be held at Baabda Palace to officially announce the budget,” he said. Lebanon is under international pressure to carry out reforms designed to reduce the deficit, estimated to have stood at $6.7 billion, or 11 percent of gross domestic product in 2018, and slash subsidies to the ailing electricity sector, which costs the state Treasury around $2 billion annually. The reforms are deemed essential to unlocking over $11 billion in grants and soft loans pledged at the CEDRE conference to bolster the ailing economy, which is suffering from a soaring national debt of $85 billion and slow growth.