BDL mapping of Lebanon’s debts: 40 to 50 billion dollars?

Source: Nida Al Watan – Imad Al-Chidiac

Between the “next week” set by Minister of Finance Yassine Jaber for launching parliamentary discussions, and Minister of Economy Amer Bisat’s statement that the draft law “is not set in stone” and can be amended, the “Financial Gap Law” is entering a different phase.

The draft law is no longer merely a text approved by the government and referred to Parliament awaiting ratification; it has become an “arena of confrontation” between three competing narratives: the government’s narrative, which seeks a roadmap for returning deposits; a banking narrative that considers the problem not so much a “gap” as it is a “liquidity crisis” and an “accusatory philosophy”; and a Western (specifically French) narrative that seeks to pass the law step by step, with amendments ensuring “payment feasibility” and preventing a future explosion.

In practical terms, the timing of the discussion is no longer a minor detail in this game. The Minister of Finance stated that parliamentary debate on the law will take place next week, presenting the draft as a roadmap with specific deadlines for returning depositors’ funds, noting that 782,000 accounts are expected to be fully repaid within 4 years. In parallel, Lebanon is awaiting a new visit by an International Monetary Fund (IMF) delegation in the coming days, making this parliamentary milestone a convergence point between domestic pressure to open the file and external pressure to link it to the conditions of an IMF program.

It is precisely here that Minister of Economy Amer Bisat’s statement emerged as a dual political and economic signal: the government does not treat the text as final and is open to introducing amendments during parliamentary discussions. This openness is not merely a formal courtesy, but rather an implicit acknowledgment that the law, in its current form, will face technical and political objections, and that passing it as is may be more difficult than passing it with “margins for amendment” that could be used to absorb concerns among parliamentary blocs, the banking sector, and possibly international partners.

The French dimension is the most sensitive in this landscape. Publicly, Paris appears supportive of the reform track and of linking it to negotiations with the IMF. At a deeper level, however, France is acting according to a risk-management logic: passing the law step by step while ensuring that it does not turn into a time bomb after ratification.

According to available information, Paris believes the text requires technical amendments, and that Parliament should direct direct questions to the Central Bank of Lebanon and the government regarding figures and methodologies, so that the law is not passed only for a gap to later emerge between what is written and what can actually be implemented, thereby undermining the ability of banks and the Central Bank to continue making payments.

In parallel, there is information suggesting that Paris is exerting clear pressure to accelerate ratification, based on an approach of “gradualism”: passing what can be passed now and building upon it later, since passing the entire package at once appears extremely difficult under the current balance of power. Within this context, French contacts with Lebanese political forces are interpreted as part of an attempt to soften positions rather than impose a final, closed formula.

According to information obtained by Nida Al Watan, Central Bank Governor Karim Souaid met French President Emmanuel Macron in Paris, presenting during the visit his approach to the law and requesting French support to ease IMF conditions, or at least to reformulate the negotiating approach in a way that is more flexible with Lebanon’s realities. It is also reported that there is an effort to change the negotiating team dealing with Lebanon within the IMF, or to push toward a new team with a different outlook.

More important than the visit itself, however, is what is being prepared afterward. According to available information, the governor is working on a documented file concerning the size of the state’s debt owed to the Central Bank, with figures far exceeding the officially circulated amount ($16 billion), potentially reaching between $40 and $50 billion. The objective behind disclosing these figures and documents is to redefine the root of the problem—not a complete bankruptcy of the Central Bank, as is sometimes portrayed, but rather a severe liquidity crisis primarily linked to the accumulation of state debt and irregular repayment mechanisms.

From here, the core dilemma of the “Financial Gap Law” becomes clear. Banking sources believe the issue lies not only in the figures but also in the philosophy and language. The law is based on terms such as “loss,” “distribution of losses,” and “penalties,” in a manner that suggests the banking sector is the primary accused party, and that the practical goal is not to rehabilitate it but to gradually dismantle it. For this reason, these parties object to the methodology from its foundation, arguing that the crisis is essentially a liquidity crisis and a sovereign debt management crisis, not a “gap” to be resolved through the distribution of disguised financial “punishments.”

This clash over characterization is not merely theoretical, because if the “loss distribution” characterization prevails, policies will be built on the basis of allocating costs and distributing losses. Conversely, if the “liquidity shortage” characterization prevails, priority will automatically shift toward restructuring state debt, regulating financial flows, and gradually restoring confidence in the banking system. The difference between the two characterizations is vast: who pays, when they pay, and how they pay.

Therefore, next week does not appear to be merely a routine discussion date within a committee or general assembly, but rather a directional test: will Parliament adopt a rapid political approach aimed at recording a legislative achievement before the international community, or will it open a strict technical debate over every figure, every financing assumption, and every repayment mechanism? Will decisive questions be raised to the Central Bank, the government, and the banks together before any final ratification?

So far, the scene suggests that no party has the luxury of making a definitive decision. The government wants the law but agrees to amend it. The French seek its passage but fear poor implementation. The banks reject the philosophy of the text but recognize that ignoring the legislative path is no longer possible. Meanwhile, the Central Bank governor is working to redraw the image of the crisis from its roots through the sovereign debt and liquidity file.

For all these reasons, it can be said that the upcoming debate will not be only about legal provisions, but about which narrative will prevail: the narrative of “losses to be distributed,” or the narrative of “liquidity to be managed and state debt to be acknowledged first.”

Based on this narrative, the fate of the law will be determined next week. Indeed, the shape of the banking system for the coming years will also be determined.