Fiscal gap law faces criticism from Lebanese-French advocacy group

The Lebanese-French Coordination Committee (CCLF) has issued a sharply worded open letter to Lebanon’s government and parliament, criticizing the draft fiscal gap law and warning that it risks entrenching injustice rather than addressing the root causes of the country’s financial collapse.

A civil society and diaspora-based advocacy group made up largely of Lebanese professionals and legal experts in France, the CCLF has been active since the onset of the financial crisis, issuing legal analyses, policy proposals, and public statements aimed at promoting accountability, judicial independence, and depositor protection. The committee has consistently positioned itself as a watchdog of reform processes it views as technocratic in appearance but politically evasive in substance.

The fiscal gap law is a cornerstone of Lebanon’s proposed financial recovery framework. It seeks to determine how losses stemming from the state’s March 2020 debt default estimated at tens of billions of dollars would be distributed among the state, the central bank, commercial banks, and depositors. While successive governments have argued that such legislation is necessary to unlock international support and stabilize the banking sector, the question of who should bear the losses has remained one of the most contentious issues in post-crisis reform.

In its letter, the CCLF acknowledged that the draft contains “some positive aspects” but said it “severely lacks guarantees” regarding both implementation and the equitable distribution of losses. The committee argued that the proposal is fundamentally flawed and arbitrary, undermining its credibility and failing to meet depositors’ demands for justice. It also criticised the absence of audits, investigations, and operational reforms, saying this reflects the state’s continued evasion of accountability.

The letter further criticized the process through which the draft law was produced, expressing “astonishment” that it was advanced without consultation with the judiciary. It pointed in particular to the role of Prime Minister Nawaf Salam, arguing that adopting the proposal without judicial input contradicts the principles of accountability and the separation of powers.

According to the CCLF, while swift action is needed to revive the economy, recovery cannot come at the expense of truth and justice. The group called for comprehensive audits into the causes of the collapse, investigations into public contracts and subsidized imports, and prosecutions of those responsible. Such measures, it said, could help recover public funds and generate resources to compensate depositors and support sustainable growth.

The committee placed responsibility for the collapse squarely on the state, the central bank, and commercial banks, rejecting any approach that shifts the burden primarily onto depositors. It noted that President Joseph Aoun pledged in his inaugural address to protect depositors and said it would be unjust to violate that commitment by legalizing what it described as the “plundering” of savings.

Beyond its technical criticism, the letter framed the issue as a moral and social crisis. It pointed to the humiliation and impoverishment of depositors particularly elderly people who lost pensions and life savings as well as younger generations forced to emigrate. At the same time, it denounced the continued impunity of politicians, bankers, and business figures suspected of corruption.

In conclusion, the CCLF urged the government to take responsibility for the legacy it inherited and to pursue a recovery based on justice rather than arbitrary financial cuts. It called on parliament to reject the current draft and adopt a law that protects depositors, preserves the banking sector, and ensures accountability, warning that the text should be referred to the Constitutional Council for review if necessary.

The intervention adds to growing pressure on lawmakers as Lebanon once again confronts the unresolved question at the heart of its crisis: who pays for decades of political and financial mismanagement.