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Macron criticises 'failing' Lebanese leaders as $370 million raised

A view shows the grain silo that was damaged during last year's Beirut port blast, during sunset in Beirut

By Michel Rose

PARIS (Reuters) -French President Emmanuel Macron criticised a "failing" Lebanese political class he blamed for their country's economic turmoil at a donors' conference that raised $370 million on the anniversary of the Beirut port blast.

One year since an explosion ripped through the capital's port and plunged Lebanon further into economic crisis, its politicians have yet to form a government capable of rebuilding the country, despite French and international pressure.

"Lebanese leaders seem to bet on a stalling strategy, which I regret and I think is a historic and moral failure," Macron said in opening remarks as host of the international donors' conference.

"There will be no blank cheque for the Lebanese political system. Because it is they who, since the start of the crisis but also before that, are failing."

France has led international efforts to lift its former colony out of crisis. Macron has visited Beirut twice since the port blast, raised emergency aid and imposed travel bans on some senior Lebanese officials in his quest for a reform package.

He has also persuaded the European Union to agree on a sanctions framework that is ready to be used.

But his initiatives have been in vain so far.

In Wednesday's videoconference, Lebanese President Michel Aoun appealed for solidarity, saying the COVID-19 pandemic had caused drug shortages and exacerbated the plight of the Lebanese people.

"Lebanon is currently going through the hardest times," Aoun said.

Addressing the messages of urgency from Macron and the international community on the need for a new government, he said: "Today we are in a new phase. I do hope that a government is formed, a government which is capable of implementing the required reforms."

Lebanon's prime minister-designate Najib Mikati, the third to attempt to form a cabinet since the last one resigned in the Beirut port blast aftermath, said this week he had hoped for a quicker pace after meeting with the president to discuss naming ministers.

U.S. President Joe Biden offered nearly $100 million in the conference that is co-hosted by the United Nations and gathered about 40 other world leaders and dignitaries.

"But no amount of outside assistance will ever be enough if Lebanon's own leaders do not commit to the hard and necessary work of reforming the economy and combatting corruption. It's essential. It has to stop now," Biden said in a statement.

Last year's conference in the wake of the blast raised about $280 million, with the emergency aid being kept away from politicians and channelled through NGOs and aid groups.

The new aid will be unconditional, Macron's office said, but about $11 billion raised in 2018 remains locked away and conditional on a series of reforms.

Macron said France would offer 100 million euros, while Germany pledged 40 million euros.

Aoun also sought to offer reassurance about the amount of money Lebanon was set to benefit from the International Monetary Fund's reserve currency, or Special Drawing Rights, saying it would be used "carefully".

Lebanon should have access to around $900 million as part of the IMF's $650 billion expansion of its emergency reserves. The new allocation of the IMF's Special Drawing Rights, is set to take effect on Aug. 23.

But IMF Managing Director Kristalina Georgieva said this will not fix the country's chronic problems.

"The SDRs are not going to fix Lebanon's longer-term structural, systemic problems," Georgieva said. "What do we need for that? We need a government that is empowered to reform and revitalize Lebanon's crippled economy."

(Reporting by Michel Rose; additional reporting by Maha El-Dahan in Beirut, Jeff Mason and David Lawder in Washington and Paul Carrel in Berlin; Editing by Giles Elgood and Angus MacSwan)