EU official says major aid to Lebanon depends on IMF deal

A European Union official visiting Lebanon said Friday that the international body will increase its humanitarian assistance to the crisis-struck country, but that more significant long-term aid depends on reforms and a deal with the International Monetary Fund.

EU Commissioner for Crisis Management Janez Lenarčič said at a press conference following his two-day visit that the EU will provide 60 million euros (more than $65 million) in humanitarian assistance to Lebanon in 2023, a 20% increase from last year.

But he warned that such aid is "not a sustainable long-term solution" to the massive financial crisis that has left three-quarters of Lebanon's population of 6 million in poverty.

To get out of the crisis, he said, Lebanon needs to elect a president -- which would resolve a presidential vacuum that has dragged on for five months - and to ink a deal with the IMF, which he said "would unlock substantial financial support also from the European Union that should help Lebanon recover from the collapse."

Progress towards finalizing a $3 billion IMF bailout package for Lebanon has largely stalled.

Since reaching a preliminary agreement with the IMF nearly a year ago, Lebanese officials have made limited progress on reforms required to clinch the deal, which include restructuring the country's debts and its ailing banking system, reforming its barely functioning public electricity system and making governance reforms.

IMF officials said continued inaction would leave the nation in a "never-ending crisis" in which it could spiral into hyperinflation.

Lenarčič also responded to increasing angst over the presence of more than 1 million Syrian refugees in the tiny country and calls for their return. He acknowledged that the large refugee presence is a challenge but said that it "does not absolve" Lebanon and its leaders of their responsibility for providing basic services.

"The current crisis in which Lebanon finds itself … was not created by the Syrian refugees," he said.

Lenarčič added that, while refugees who want to return are free to do so, the EU's position is that "the conditions are still not right in Syria for safe and voluntary return."

At the same time, he said the EU is not ready to consider lifting sanctions or funding major reconstruction in Syria. Oil-rich Gulf Arab countries that had previously cut ties with Damascus over the Syrian government's brutal crackdown on protesters and later on civilians during the war, have been stepping up efforts to normalize ties with President Bashar Assad's government in Damascus since last month's devastating earthquake.

While the U.S. and EU have offered temporary sanctions released in the aftermath of the earthquake, Lenarčič said major reconstruction funding is not on the table until there is "tangible progress toward a political resolution" to the uprising-turned-civil-war that has now entered its 13th year.