France offers Lebanon 500 mln euro soft loan
Source: Reuters
By Elizabeth Pineau PARIS, Jan 24 (Reuters) - France offered Beirut a soft 500 million euro loan on Wednesday ahead of an international donors conference in Paris, amid fears that political unrest in Lebanon could undermine efforts to rebuild its shattered economy. France led the diplomatic push for an international peace force for Lebanon that helped usher in an end to a war between Hezbollah and Israel last year, and organised Thursday's meeting to drum up the billions needed to reconstruct the country. "France will bring its support to Lebanon in the form of a 500 million euro loan with very favourable conditions," said Jerome Bonnafont, spokesman for French President Jacques Chirac. Lebanon is a former French protectorate. The offer came after Chirac on Tuesday said Lebanon's government had practically run out of money and that anti-government riots in Lebanon could discourage donors. Lebanese Prime Minister Fouad Siniora, speaking after a lunch with Chirac, echoed his concerns. "Taking to the street can only aggravate the situation and increase tensions," said Siniora, a day after protests against his Western-backed government shut down much of Lebanon and sparked its worst unrest since the 1975-1990 civil war. Three people were killed and 176 wounded. Siniora's under-pressure government wants financial aid to help cover the costs of the July-August war between Hezbollah and Israel, which crippled the economy and exacerbated political tensions within the country. Hezbollah and its allies, including Christian leader Michel Aoun, want veto power in government and early parliamentary elections to remove what they call a U.S. cabinet in Lebanon. French officials say around 50 countries and organisations will take part in Thursday's donors' meeting but decline to say how much money they expect to be pledged. The European Commission said on Wednesday it was pledging almost 400 million euros ($520 million) of additional aid to Lebanon. That would bring to 500 million euros the total provided to Lebanon by the EU executive since last June. The Lebanese government hopes for political backing from its foreign allies and up to $5 billion in assistance to help ease the burden of Lebanon's $40.5 billion public debt -- equal to 180 percent of gross domestic product.
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