Germany to propose Beirut port reconstruction: report
A massive explosion triggered by improperly stored chemicals at the port ripped through the Lebanese capital in August last year, killing more than 200 people and causing billions in property damage.
Both Germany and France are vying to back reconstruction efforts with hopes of also encouraging a solution to Lebanon's intractable political crisis, two diplomatic sources told Reuters.
Germany will outline its proposal on April 7, the sources said.
The European Investment Bank has agreed to fund the reconstruction efforts to the tune of 2 to 3 billion euros ($2.4 - 3.5 billion), the sources added.
The German proposal would involve the redevelopment of surrounding areas of the capital as well as the port itself.
The total cost of the project is estimated at between $5 to 15 billion and would create some 50,000 jobs, the sources said.
Lebanon's political elite will first be required to form a new government that will tackle the country's protracted economic crisis and root out corruption, a condition that other donors including the International Monetary Fund (IMF) have previously established.
"Germany and France want first to see a government in place committed to implementing reforms. There is no other way around it and this is good for Lebanon," one of the sources told Reuters.
Such a government was the demand of Lebanese protesters even before the August explosion, after which the cabinet brought in amid demonstrations against the sectarian and corrupt political elite resigned.
That cabinet remains in place as a caretaker government until now, with Prime Minister-designate Saad al-Hariri and Presiden Michel Aoun unable to agree on forming a new cabinet.
In the mean time, the country has descended further and further into an economic abyss.
The economic and financial crisis roiling Lebanon is the gravest threat to its stability since the 15-year civil war ended in 1990.
The country's local currency has been in a free fall since late 2019, losing over 90 percent of its value. The government defaulted on its foreign debt last year and nearly half the population has been pushed into poverty and unemployment.
Prices of basic goods have increased and inflation has soared. Banks have imposed informal controls on people's savings, and the Central Bank's foreign reserves have shrunk in a country dependent on imports.