EU urges adoption of balanced state budget

2011 progress report on Lebanon cites little progress in telecom and energy reforms

The adoption of a balanced state budget for Lebanon is a precondition for obtaining EU financial support, the EU commission said in a report published on May 15.

The 2011 progress report on the implementation of the European Neighborhood Policy (ENP) indicated that the accomplishment of the ENP Action Plan priorities was mixed. It said that despite the Central Bank’s broad support to macroeconomic performance, little progress has been made with fiscal consolidation and structural reforms including in the energy and telecommunication sector.

The report said that the volume of bilateral trade between Lebanon and the EU came to around $7 billion in 2011. “Lebanon’s lack of progress in the accession to the World Trade Organization remains the main obstacle to further trade liberalization with the EU,” it said.

The report indicated that very little progress has been made to promote the free movement of goods. It said that the planned reforms in the areas of food safety, competition, public procurement, business climate, and statistics made no progress at the legislative level.

The EU underlined the need for Lebanon to improve the management of its public finances, including the adoption of the law on public procurement. It also called for the adoption of a new electoral law ahead of the legislative elections in 2013.

The EU called on the government to adopt structural measures in reforming the energy sector, implement the electricity plan, and enhance the use of renewable energy sources. It called for government measures to strengthen the independence of the Telecommunications Regulatory Authority (TRA), with a view to possible liberalization of the telecoms sector.

The overall budget of the EU’s assistance to Lebanon in the framework of the ENP is around $190 million over three years, around $63 million per year.

Reported by Hanadi Chami