Lebanon's parliament on 2 December approved an important element of Prime Minister Rafiq Hariri's economic reform programme, passing a draft law allowing the government to borrow up to $7,000 million. The new debt would be exchanged for more expensive debt to lower debt servicing costs. 'I would like to assure MPs that this is not about borrowing more money, but replacing one type of loan with another,' Hariri told parliament.
The agreement comes in the wake of 23 November's Paris II donors' conference, at which Hariri secured pledges of $4,400 million in concessionary loans to help tackle the country's huge public debt (MEED 29:11:02). Hariri told legislators that the bill was a necessary accompaniment to these pledges. Parliament insisted on some assurances from the government in return for its approval. The executive promised to abandon $2,000 million of borrowing set out in the 2003 budget, and to ensure that foreign-currency denominated debt never exceeded that denominated in Lebanese pounds.
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