Lebanon’s budget spending is at a freeze until Cabinet approves extra money

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Finance Minister Ali Hassan Khalil Wednesday offered ministers one of two choices: legalize the extra budgetary spending in Parliament or their ministries will not receive additional funds.

“No one should assume that the finance minister will spend extra money without a prior approval from the Cabinet or Parliament. Either extra spending is [authorized] through an approval for more spending from the Parliament or [there is a freeze in] allocations to all the ministries,” the minister told reporters at a news conference.

The minister insisted that the there is sufficient cash in the treasury to cover the current spending of all ministries until the end of this year, but warned that any spending above the last official budget ceiling is illegal, adding that he will not take such a responsibility.

Observers say Khalil is trying to push ministers from the Free Patriotic Movement into resuming discussions of important files presented to the Cabinet instead of voicing new demands to Prime Minister Tammam Salam.

Khalil repeated that he will not be able pay the salaries of civil servants in September if the extra budgetary spending is not approved by either the Parliament or Cabinet.

But sources believe that the ministries will find a last-minute solution to the issue of the extra budgetary spending, noting that Khalil is only trying to intimidate his opponents.

The minister renewed his warning that Lebanon is about to lose several grants and loans that are vital to development projects.

“There are loans and grants worth over $1 billion that are pending approval, some of which are at risk of being canceled,” Khalil warned.

“Their constitutional approval will help create development projects in several areas,” he added.

Khalil said that there are 14 loans that require parliamentary approval, that are worth $1.162 billion.

“There are proposed loans that require decrees from the Cabinet, and it is on the Cabinet to meet to advance [the issue] to the Parliament,” he added.

There are nine loans that are at risk of being canceled because they have specific terms, especially those granted by the World Bank. One World Bank loan waiting approval is worth $474 million and is earmarked for a vital water supply development program.

Taking aim at FPM ministers and lawmakers who questioned the extra spending figures he presented, Khalil said that he was surprised that “a group with broad representation proposed what they proposed [on Tuesday] concerning [civil servants’] salaries.”

“I do not need a platform to confirm our unwavering stance on the need for the work of Parliament, and this is not an escalation through the media directed toward any politicians over the subject of salaries,” he said.

“There is a fine line between what is proposed and the need for decisions to be issued to take care of the citizens’ [needs],” he added.

“We [the Finance Ministry] halted spending on a lot of the ministries so that we could make up for some [pressing] needs, [hoping] that all colleagues ... deal with all issues in accordance with the constitutional framework.”

The minister explained that the budget bill was referred to Parliament on March 19, 2015, and is not related to the current crisis.

“The bill is not related to the spending and all the decrees were issued according to procedures,” he said. “Nobody thought that the finance minister would act contrarily by spending without a ministerial decision so that political issues don’t get mixed.”

The minister concluded the news conference by reiterating his ministry’s respect for due legal and governmental process. “We will not default on the payment of any treasury bills or any dues on the Finance Ministry as there is a constitutional text that we respect,” he said.

SOURCE: Al-Bawaba, 06/08/2015, http://www.albawaba.com/business/lebanon%E2%80%99s-budget-spending-freez...