(1)

On 7 December 2020, the Council adopted conclusions in which it noted with increasing concern that the grave financial, economic, social and political crisis that has taken root in Lebanon had continued to worsen over the previous months and that the Lebanese population is the first to suffer from the increasing difficulties in the country.

(2)

The Council underlined the urgent need for the Lebanese authorities to implement reforms in order to rebuild the confidence of the international community. It stated that the Union is ready to support reforms but the reform process must be owned by Lebanon. The Council called on the Lebanese authorities to implement their prior commitments, including those made in the context of the CEDRE conference in April 2018, and which enjoy the support of the International Support Group (ISG) for Lebanon (which brings together the United Nations and the governments of China, France, Germany, Italy, the Russian Federation, the United Kingdom and the United States, together with the European Union and the Arab League) and other members of the international community (including the World Bank and the International Monetary Fund). The Council also called on the Lebanese authorities to urgently deliver reforms building on the agreements reached after the explosion of 4 August 2020 by all of Lebanon’s political leaders to bridge political differences in support for reforms. Those reforms entail in particular meaningful and profound economic and governance reforms to restore economic stability, improve delivery of public services, address the rising levels of poverty, reduce inequalities, make public finances sustainable, restore the credibility of the financial sector, guarantee the independence of the judiciary, ensure respect for human rights and the rule of law, fight corruption and meet the legitimate aspirations peacefully expressed by the Lebanese people. The Council also expressed its support for the Reform, Recovery and Reconstruction Framework (3RF) to ‘build back a better Lebanon’ guided by the principles of transparency, inclusion and accountability.

(3)

The 3RF, launched by the Union, the UN and the World Bank in December 2020, is co-managed by the Government of Lebanon. In addition, the Financial Recovery Plan of April 2020 was approved by the Lebanese Council of Ministers and was welcomed by the international community. Furthermore, the ISG, in a Joint Statement on 23 September 2020, welcomed the agreement reached by all of Lebanon’s political leaders on a comprehensive roadmap of reforms with an implementation timetable in line with their prior commitments, including those made in the context of the 2018 CEDRE conference, and which enjoy the support of the ISG and other members of the international community.

(4)

In its conclusions of 7 December 2020, the Council continued to urge the government acting as caretaker since August 2020 to act swiftly and decisively within its constitutional limits, but noted that a programme fully supported by the Lebanese Parliament that includes precise, credible and time bound reform commitments addressing Lebanon’s difficulties could only be fully implemented by a functional government. It therefore called on all Lebanese stakeholders and political forces to support the urgent formation of a mission-driven, credible and accountable government in Lebanon, able to implement the necessary reforms.

(5)

The Council has since 7 December 2020 repeatedly expressed grave concern about the deteriorating situation in Lebanon. Despite repeated calls from the Union and other relevant international actors on Lebanese political forces and stakeholders to act in the national interest and to no longer delay the formation of a fully empowered government capable of meeting the country’s urgent needs and implementing critical reforms, there is no progress in the government formation process. Over eleven months have elapsed since the resignation of the previous government in August 2020 and nine months since the Lebanese Parliament designated a new Prime Minister-designate in October 2020 who has withdrawn in July 2021.

(6)

Meanwhile, the economic, social and humanitarian situation in Lebanon continues to deteriorate and the people continue to suffer. The World Bank reported in its Lebanon Economic Monitor of June 2021 that Lebanon is enduring a severe and prolonged economic depression, likely to rank amongst the most severe episodes of crisis globally since the mid-nineteenth century. The World Bank characterised the crisis as a ‘deliberate depression’ with inadequate policy responses as a result of a lack of political consensus over effective policy initiatives. The World Bank reported that more than half of the population is likely below the national poverty line, the unemployment rate is on the rise, and an increasing share of households is facing difficulty in accessing basic services, including health care. The World Bank pointed out that the sharp deterioration in basic services would have long-term implications: mass migration, loss of learning, poor health outcomes and lack of adequate safety nets, among others. The World Bank estimated that the permanent damage to human capital would be very hard to recover and that this perhaps made the Lebanon crisis unique compared to other global crises. The World Bank further notes that the increasingly dire socio-economic conditions risk systemic national failings, with growing wariness of potential triggers for social unrest and no clear turning point on the horizon.

(7)

The Lebanese population is paying an exceptionally high price for the inaction of the Lebanese political leaders. The current economic, social, humanitarian and political crisis constitutes a major threat to the stability and security of Lebanon, with possible consequences for the stability and security of the entire region.

(8)

The Union is ready to use all its policy instruments to contribute to a sustainable way out of the current crisis and to react to a further deterioration of democracy and the rule of law, and of the economic, social and humanitarian situation in Lebanon. In view of the gravity of the situation, a framework should be adopted for targeted restrictive measures against natural persons responsible for undermining democracy or the rule of law in Lebanon and natural or legal persons, entities or bodies associated with them.

(9)

Such targeted restrictive measures will pursue common foreign and security policy objectives as set out in Article 21 of the Treaty on European Union (TEU), and they will contribute to Union action to consolidate and support democracy, the rule of law, human rights and the principles of international law in accordance with point (b) of Article 21(2) TEU. Their application must be consistent with Article 3(5) TEU, in particular by contributing to peace and security, solidarity and mutual respect among peoples, and the protection of human rights, as well as to the strict observance and the development of international law, including respect for the principles of the United Nations Charter.

(10)

A threat to democracy and the rule of law is posed by persons who obstruct or undermine the democratic political process by persistently hampering the formation of a government or by obstructing or seriously undermining the holding of elections, including notably the upcoming general election in Lebanon, scheduled for May 2022. Those persons promote their vested interests, be they their personal interests or the particular interests of their community or political group, to the detriment of the Lebanese public interest, notably by trying to misuse the rules governing the association of the political forces for the formation of a government, in order to block the formation of a new government and maintain the status quo. Acts threatening democracy and the rule of law could include obstructing or undermining the elections.

(11)

A threat to democracy and the rule of law is also posed by persons who obstruct the implementation of plans supported by relevant international actors to improve accountability and good governance in the public sector or the implementation of critical economic reforms, including in the banking and financial sectors. These are notably the reforms to which Lebanese authorities committed and that enjoy the support of the Union and other relevant international actors. There has been a consistent failure to implement these reforms and to take sufficient credible measures to fight corruption and combat tax evasion, to adopt a capital control law, and to take other measures to guarantee both transparency and full accountability to the Lebanese people.

(12)

A threat to democracy and the rule of law is also posed by persons who engage in serious financial misconduct, including corruption and the unauthorised export of capital. Financial misconduct within the political and institutional system is a systemic issue at the root of the current economic, social, humanitarian and political crisis. Actors involved in financial misconduct, or who benefit personally from them, bear a major responsibility in the dire socio-economic and humanitarian situation which the Lebanese population is facing.

(13)

The Council recalls that Lebanon is a party to the United Nations Convention against Corruption of 31 October 2003 and that the Lebanese authorities have also made commitments in the fight against corruption notably in the 2018 CEDRE conference, the April 2020 Financial Recovery Plan and the September 2020 comprehensive roadmap of reforms.

(14)

Further Union action is needed in order to implement certain measures,