Finance Committee approves funding to increase public sector pensions

BEIRUT —The Finance and Budget Committee has approved the opening of an additional line of credit worth 2,250 billion Lebanese pounds in order to fund the planned increase in public sector pensions, an amount equal to about $25 million at the current market rate.

The decision was announced by the committee's head, Metn MP Ibrahim Kanaan, who also provided updates on the April 2025 bill authorizing the Banque du Liban (BDL) to print larger bills.

Public sector employees have still not seen their wages and pensions adjusted to match the dramatic devaluation of the Lebanese pound by 98 percent since the start of the economic crisis in 2019, meaning they're currently being paid well below a living wage.

The line of credit will be used to cover the long-awaited increase, set at LL12 million (about $134) per month for "all public retirees," Kanaan said, calling for a "comprehensive and fair solution to this issue."

He asked the Finance Ministry and the government to provide "an estimate of the financial impact of this measure by the end of the year, particularly regarding any additional credits that might be required," saying he is concerned about opening further credit lines that "exceed the ceiling of the adopted budget."

"It is therefore necessary to ensure complete transparency in the 2026 budget," he said, adding that he has requested information on the current state of account 36 (the Treasury account), available revenues, and forecasts through the end of the year.

New Lebanese pound banknotes

The committee has also, Kanaan announced, "amended the law authorizing BDL to issue banknotes in various denominations of the national currency."

This law was adopted by Parliament in April 2025 and was meant to pave the way for the issuance of 500,000, one million, two million, and five million Lebanese pound bills, in response to the lira's loss in value.

"The president had sent the law back because of a contradiction between the justifying reasons and some of its articles. Today, the Finance Committee has corrected this contradiction by amending the justifications, so the Banque du Liban may now issue new denominations up to five million pounds, once the law is adopted in a plenary session," Kanaan explained.

He added that BDL has confirmed the existence of a mechanism to "replace the bills in circulation, to avoid an inflation problem."

Kanaan also stated that he discussed a law introduced by parliamentarian Ibrahim Mneimneh and already approved by the Defense Committee, concerning Internal Security Forces (ISF) officers who deserted after 2019 as a result of the crisis.

The bill, which "regularizes" their situation by considering these officers as dismissed, not deserters, will be studied in more detail at the next committee meeting on Monday, he said.