Tougher times ahead: Lebanon's Finance Minister warns public servants risk no December pay

With one month to go before he shuts down his office, Finance Minister Ali Hasan Khalil warned public employees to be financially prepared for the possibility of not getting their December paycheck.

“The danger began affecting the Lebanese government, which could shut down,” Khalil said in comments published Wednesday by local newspaper As-Safir. “I would like to frankly say that in the end I will be forced to close the ministry’s steel gate, unless we rush to put things back on the right track,” Khalil warned.

“The Finance Ministry would be unable to pay the December salaries for public sector servants if Parliament fails to endorse the appropriation bill,” he stressed.

Khalil said Lebanon is at risk of losing World Bank loans if Parliament fails to convene and approve the state budget.

“We will certainly lose three loans worth $700 million, most importantly a $474 million loan to finance the water supply augmentation project if Parliament did not approve the budget by December,” said Khalil, from Speaker Nabih Berri's bloc.

The Water Supply Augmentation Project of Lebanon aims at increasing the volume of water available to the Greater Beirut and Mount Lebanon area.

Even worse, Khalil added, the World Bank would suspend loans with the guilty party for two years.

The World Bank stipulates that any grant or loan provided to a country for a specific development project must be executed within a certain time frame or it will be obliged to withdraw the money and allocate it to other countries.

Berri Tuesday urged lawmakers to meet and approve the state budget before Lebanon loses $600 million in soft loans provided by the World Bank.

The long protracted presidential election crisis has paralyzed Parliament.