Finance Ministry rejects allegations of 'discrepancies'.
BEIRUT: The Finance Ministry rejected allegations that the open government borrowing from the market has contributed to the rise of Lebanon's public debt.
In a statement, the ministry described the MP Ibrahim Kanaan's allegation as inaccurate and highly exaggerated.
Kanaan claimed that the Finance Ministry was nine months late in sending the 2010 draft budget to the Parliament for approval. He also said that the budget, which was passed by the Cabinet four months ago, had lot of discrepancies and even failed to explain how the successive governments since 2005 spent over $11 billion.
"We should remind Kanaan that the government was formed in November 2009 and only and for this reason the ministry had a short time to prepare the budget," the statement said.
The Finance Ministry added that ministers had 15 days to present their budgets but ministers Jebran Bassil and Charbel Nahas were particularly late in submitting their budgets on time.
The ministry stressed that the debate on the budget was very long in the Cabinet and this is another reason why it was unable to send the budget to the parliament on time.
Finance Minister Raya Haffar Hassan held marathon talks with every minister to review the needs of their ministries and had to ensure that the requests would not further burden the strained treasury. The ministry wanted to secure sufficient funds for these ministries so that they could carry out their programs, the statement said.
Hassan explained to the Energy and Water Minister Jebran Bassil that the financial resources of the ministry are not sufficient to meet the demands of his ministry.
According to the new budget, government spending has jumped by close to $1.1 billion due to the big allocations for construction of electricity plants and infrastructure projects.
About LL 1 billion was allocated to the electricity sector in 2010 although Bassil is requesting $5 billion to boost power production from 1,500 MW to 4,000 MW. Many experts believe that Bassil's plan is over ambitious and unrealistic because the projects require huge funds.
The statement said that after long talks, Hassan persuaded Bassil to reduce the allocations for the energy project.
It also denied that the ministry is depriving the municipalities of funds, adding that all these funds have been placed in account at the Central Bank.
The ministry emphasized that it did not exceed the borrowing ceiling which was set at $7 billion, adding that it is merely refinancing the public debt in accordance with Paris III requirements.
It also accused the minister of telecom of withholding $860 million that was supposed to be allocated to the Finance Ministry on time to pay all its dues.
The ministry said that this money was sufficient to settle all the dues of the municipalities. -- The Daily Star
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