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A budget for Lebanon without a government?

Economy

Speaker of Parliament Nabih Berri says it’s possible for a caretaker government to approve the annual budget, citing a 1969 legal precedent.


07/01/2019
The process of forming a new government in Lebanon is still dragging on. One consequence of the long delay is that a budget for 2019 has not been approved and, as a result, government ministries could soon start running out of money. “Ministries risk being short of funding if a government is not formed within a month,” caretaker Minister of Finance Ali Hassan Khalil warned last week during a meeting with Prime Minister-designate Saad Hariri.

The Ministry of Finance finalized a preliminary draft budget last September and forwarded it the Council of Ministers. But there is no government in place to examine it, and the constitutional requirement of sending it to parliament for approval 15 days before the usual start date of its autumn session has long since passed.

Khalil’s statement was a clear message that he does not intend to resort to stop-gap measures that will allow ministries to continue to function without a formal budget. Between 2006 and 2017, Lebanon did not have a formal budget. Instead, a provision allowing for one-twelfth of the previous year’s budget to be allocated for the first month of the following year in the absence of a new budget was used to keep the Lebanese government running for 11 years. Ministries then financed a large part of their non-budget expenses through treasury advances.

In 2017, the Lebanese parliament finally approved a formal budget. Given the current economic difficulties facing the country and the need for fiscal reform, a return to stop-gap funding measures could have a catastrophic impact on Lebanon’s public finances. The situation is particularly dire as the budget deficit more than doubled in one year, reaching almost $4.5 billion in the first nine months of 2018 – just $0.3 billion shy of the budget ceiling for the entire year.

"Exceptional circumstances"

Khalil, a member of the Amal Movement, also voiced his support for a proposal put forward by Speaker of Parliament, and Amal leader, Nabih Berri that the caretaker government meet to pass the 2019 budget. If that happened, the budget would be sent directly to parliament, and its approval would not have to wait until after the formation of a new government.

Berri’s proposal is based on a precedent set in 1969 by the caretaker government of then Prime Minister Rashid Karami. "In 1969, the government of Rashid Karami, although having resigned, had indeed met to approve the draft budget, citing ‘exceptional circumstances’. These jurisprudential acrobatics would be almost acceptable to unblock the situation,” Ziad Baroud, a lawyer and former minister of interior, told L'Orient-Le Jour (OLJ).

Before the 2019 budget is approved by a caretaker government, another major issue should be addressed, which is the closure of the government’s accounts for the previous years. "According to Article 87 of the Constitution, the budget for one year can not be published until the balance sheet of the previous year has been voted [on] by Parliament. But the last voted balance sheet is that of 2003 (voted in 2005). It is time to end this irregularity,” Baroud said.

Article 87 of the Constitution has been bypassed before. In 2017, parliament approved a budget without closing the previous year’s public accounts by including an article that granted MPs one year to vote on the settlement of laws and also the public accounts from 1993 to 2015. The one year deadline expired last November, even though the Ministry of Finance confirmed to OLJ that the audit of the accounts would be complete in October. The accounts must now be studied by the Court of Auditors before being forwarded to parliament. Whether it is the caretaker government or a new government, these assessments will need to be submitted in the form of bills to parliament along with the draft budget for 2019.

(This article was originally published in French in L'Orient-Le Jour on the 4th of January 2019)


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L'EXPRESSION DE LA LIBRE ANALYSE

LES GATEAUX DANS LES ASSIETTES DES MEMES ABRUTIS...

Mounir Doumani

"Speaker of Parliament Nabih Berri says it’s possible for a caretaker government to approve the annual budget, citing a 1969 legal precedent."

It is a constitutional duty to issue and approve the budget irrespective of the nature of the government. This is its primary "caretaker role" and cannot be a matter of opinion.

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