Cabinet Resolves Overspending Crisis, Approves Loans for Development Projects

The cabinet approved on Thursday LL10,394 billion to cover the expenses of state institutions in 2012 and LL600 billion to carry out development projects in Tripoli and other areas across Lebanon, a major breakthrough following months of wrangling on the extra-budgetary spending.

Following a session held under President Michel Suleiman at Baabda palace, Information Minister Walid al-Daouq said the LL10,394 billion would come in the form of a credit to cover the expenses of institutions for the rest of the year.

The expenses will be made through treasury loans that Finance Minister Mohammed Safadi will prepare in the form of a draft law and propose to the cabinet during its next session at the Grand Serail on Tuesday.

The Information minister also said that the government approved a treasury loan of LL150 billion for development projects in the northern city of Tripoli and a draft law of LL450 billion to carry out similar projects in several Lebanese areas.

The major decision-making came following an agreement between the March 8 forces that make up the majority of the government and Premier Najib Miqati who were at loggerheads on how to solve the overspending crisis.

Informed ministerial sources told Beirut dailies that the extra-budgetary spending bill will be referred to parliament for approval. But if lawmakers fail to give the green light to the spending, then Suleiman would sign it under his constitutional authorities.

Miqati held closed-door talks with Suleiman ahead of the session.

When the cabinet convened, Suleiman told the ministers about the national dialogue that he is sponsoring at the presidential palace next Monday.

He also called for the implementation of development projects and discussed with them his tour to Gulf countries and attempts underway to set free 11 Lebanese Shiite pilgrims kidnapped in Syria.

The prime minister told As Safir newspaper that the deal reached between the different parties of the cabinet would “reflect positively on the government and consequently on the country.”

The cabinet has no choice but to boost its productivity, he said.

The meeting held on Wednesday at the Grand Serail between Miqati and several March 8 ministers put the final touches on their agreement over the extra-budgetary spending.

They also discussed the draft state budget in detail amid a tendency to reject an increase in the Value Added Tax on consumer goods. Instead there would be a 5 percent rise in VAT on luxury items although Safadi hasn’t been encouraged by this suggestion.