Diplomats tell Lebanon to forget aid before a new government implements reforms

Lebanon should not expect to receive international aid to its battered economy until a new government undertakes serious reforms, diplomats said at a closed-door meeting in Paris on Wednesday.

The international group, led by France and the United Nations, met to discuss conditions for helping ease turmoil in Lebanon, which is facing its worst financial crisis in decades and political uncertainty amid an ongoing mass protest movement.

Lebanese businesses and households have become increasingly desperate as the country faces an escalating liquidity crisis. The economy's already fragile state was a major push factor behind the start of the protests, which erupted in mid-October. 

Representatives from several countries, including the United States, and international financial institutions agreed on a set of principles Lebanon must meet before it can expect to receive foreign cash.

Attendees agreed to give technical advise to Lebanese institutions but rejected providing the bailout that caretaker Prime Minister Saad al-Hariri had requested, US Assistant Secretary for Near Easter Affairs David Schenker said.

Hariri had called on Saudi Arabia, France, Turkey, the United States, China, and Egypt to send funds to help Lebanon finance imports.

"There's no aid package, there is no bailout," Schenker told the Associated Press. "Lebanon is not being saved from its financial mess."

Schenker said the group is considering sending some humanitarian aid to Lebanon to alleviate residents' suffering, though it was unclear when or how much.

Demonstrators have blamed the economic crisis on the corruption and mismanagement by the country's entrenched political class.

French Foreign Minister Jean-Yves Le Drian said in closing remarks the group supports protesters who have taken to the streets to call for a complete overhaul of the Lebanese political system.

"The Lebanese have mobilized for many weeks to demand reforms. They must be heard," he said.

Le Drian called the "institutional void" that has existed since Hariri resigned as prime minister in late October "worrying".

Hariri has continued as caretaker prime minister after politicians failed to form a new government. Negotiations have come to a stalemate.

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Protesters want to see a non-sectarian, technocratic government - and they want all traces of the old regime, including Hariri, out of office.

As the Paris meeting got underway, dozens of protesters in Beirut and Paris rallied to call on assembled leaders not to give financial assistance until a new government comes together.

"This authority ... no longer represents the Lebanese," said a protester in Beirut reading a letter to be delivered to the French ambassador. Calling the current government corrupt, the protester said: "We don't want [the aid] to go to waste."

Draped in Lebanese flags, protesters outside of the Foreign Ministry in Paris shouted "Revolution!" and criticized French officials for including members of the old government in Wednesday's discussions. Several Lebanese representatives, including officials from the foreign and finance ministries and the Central Bank, attended.

Le Drian said the international group supported the creation of a "competent government" but did not take a position on what form a new government should take, nor whether Hariri should have a part in it.

Separately, U.S. Secretary of State Mike Pompeo told reporters in Washington on Wednesday that "the responsibility lies with the Lebanese people" to push for a new political order. He said the US is ready to "do the things that the world can do to assist the Lebanese people getting their economy right and getting their government right".

The US has escalated its sanctions on the Iran-backed Lebanese Hezbollah group, which dominates the national unity government that Hariri headed.

Still, Schenker insisted the US is not laying out conditions for which groups can be included in the new government.

"We have stuck until now with focusing on a set of principles, which is not who is the prime minister, not who is the minister of finance, not what party they're from, not what religion they're from - but whether they are capable of reform," he told AP.

More than 50 countries pledged last year to give Lebanon $11 million in aid, conditioned on Hariri implementing long-stalled reforms. Promised reforms never materialised.

Hundreds of Lebanese business owners gathered Wednesday in central Beirut to protest the delay in forming a new government and threatening a collective tax strike.

Organisers said most private businesses have already been unable to pay taxes and are still getting slapped with penalties.

"What we are asking for is to cancel the penalties. We can't afford paying," said Samir Saliba, a business owner.

In recent weeks, hundreds of people have been laid off or are receiving reduced salaries, while many businesses had to shut down.

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