‘Tug of war between Germany and France to direct the reconstruction of the port of Beirut’ | Financial

A gigantic chemical explosion last August killed 200 people, injured thousands and devastated entire neighborhoods in the Lebanese capital. The disaster further troubled the country, already suffering from the deepest political and economic crisis since the civil war of 1975-1990.

According to two diplomatic sources, Germany and France are fighting for control of the reconstruction plans. Berlin will explain its proposal on April 7, which diplomats believe would in principle have support from the European Investment Bank (EIB). The financing of the EIB could be between EUR 2 billion and EUR 3 billion.

The German ambassador to Lebanon confirmed that a proposal will be made next week for the redevelopment of the port of Beirut and nearby areas. The plan has been prepared by several private companies, who will explain it in Beirut.

Lenders

But first, Lebanon’s political elite must agree on the composition of a new government to get public finances in order and fight corruption. That’s a condition that lenders, including the International Monetary Fund, are pushing for before releasing billions of dollars in aid.

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

Foreign lenders have said the new government must have a solid mandate to implement economic reforms. Then, in addition to an audit of the central bank, it is also about an overhaul of the wasteful energy sector. Germany and France too would first like to see a government committed to reform. That would be the only way, which is also good for Lebanon, according to the initiates.

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