‘Tug-of-war between Germany and France to drive reconstruction of Beirut port’ | Finance

A massive chemical explosion last August killed 200 people, injured thousands and destroyed the entire neighborhood of the Lebanese capital. This catastrophe further aggravated the country, which was already plagued by a deep political and economic crisis after the 1975-1990 civil war.

According to two diplomatic sources, Germany and France are struggling to control reconstruction plans. Diplomats say Berlin will present its plan on April 7, which in principle will have the support of the European Investment Bank (EIP). EIB’s funding could be between 2 2 billion and 3 billion.

The German ambassador to Lebanon confirmed that plans to redevelop the port of Beirut and nearby areas would be made next week. The plan has been drawn up by several private companies, who will explain it in Beirut.

Lenders

But first, the Lebanese political elite must agree to the formation of a new government to obtain public funds and fight corruption. This is a condition that lenders, including the International Monetary Fund, put forward before they can help with billions of dollars.

Eight months after the port disaster, many Lebanese who lost their families, homes and businesses are still waiting for the results of an investigation into the causes of the bombing. Lebanon is on the brink of collapse. Shopkeepers fight for goods, protesters block roads and businesses are closed.

Foreign lenders say the new government should have a strong mandate to implement economic reforms. Then, in addition to the central bank’s audit, it also includes the restructuring of the wasteful energy sector. Germany and France want to see a government committed to reform. This is the only way, it is good for Lebanon, according to the starters.