Lebanon is once again on the brink not just politically, but financially.
After years of economic collapse in 2019 and devastating fighting in recent years, the country faces record levels of recovery and the risk of de facto default. The World Bank estimates that recovery from the recent conflict alone will cost around $11 billion.
The government is therefore negotiating a bailout with the IMF, but an agreement is contingent on complex banking and fiscal reforms.
France and the EU: Political Support or Action?
The question remains whether France and the European Union will intervene beyond aid or limit intervention to observation and targeted support.
At first glance, Paris is already playing a significant role: President Emmanuel Macron has repeatedly called for international support for Lebanon and announced the preparation of a donor conference, with France actively lobbying for the renewal of international security mechanisms, such as the UN mandate for Lebanon (UNIFIL).
Policy Gaps: Declarations & Policy
However, there is a significant gap between declarations and real policy.
European institutions tend to act within the framework of rules and conditional schemes: before allocating significant resources, the EU requires a macroeconomic program and guarantees of reforms that will confirm the sustainability of investments and loans.
In its visits, the IMF emphasised “some progress”, but pointed out the need for further steps: changes to banking secrecy laws, laws to resolve the banking crisis, and measures to combat money laundering. Without these elements, international financial support will be extremely limited.
Political and military dynamics are another factor that constrains European resolve. Lebanon’s major political force, Hezbollah, remains an informal military factor in the south and in parliamentary politics despite American-led efforts to disarm the militia.
The U.S. and Israel have their own conditions for participation and reconstruction funding, including progress in disarming irregular forces, making international coordination difficult and politically fragile.
France, on the other hand, has demonstrated a willingness to provide diplomatic and partial financial assistance, but clearly has no intention of interfering in internal power calculations by force.
Pathways Ahead: Three Options
The first, most likely, is conditional and limited support: the EU and France continue to finance humanitarian operations and targeted reconstruction projects, while actively working with the IMF, World Bank, and international donors to achieve agreement on a package of reforms and debt restructuring. This path will reduce immediate social tensions, but is unlikely to remove the systemic risk of default without a large-scale restructuring of private and public debt.
The second scenario is a broad international coalition of donors, led by France and the EU, which agrees on a large aid package with strict conditions on reforms and security guarantees (including strengthening the Lebanese army as a “guarantor” of order). This option is possible if the Lebanese leadership demonstrates rapid and verifiable reforms if and when regional players (including the U.S. and the Gulf states) agree to financial coordination.
Yet this requires political courage from Beirut as Hezbollah militia may pressure Shi'ite ministers into resigning, setting off social unrest in any case.
The third option is European observation: the EU will limit itself to humanitarian aid and sanctions if there are no reforms. The risk is a gradual economic and financial collapse, an even greater deterioration in the lives of the population and increased instability, which in the long term could create another flow of refugees and new regional instability. There are already alarming signals: the inclusion of Lebanon in the “restricted” lists and problems with financial flows make the market less attractive for investment.
Europe, especially France, will opt for conditional activism in the near future; they will not remain passive observers, but they will not conduct a “rescue operation” without clear guarantees. Practical instruments that make sense are coordination with the IMF (to provide macro-financial support), targeted grants for infrastructure rehabilitation, expanded technical assistance for courts and banking reform, and strengthened capabilities of the Lebanese army within the framework of international security programs.
These steps can simultaneously reduce systemic risks and create space for political change at home.
All this is possible on one condition: Lebanese elites must translate reform rhetoric into concrete action and allow transparent access for international auditors. If they do not, Europe risks remaining a critical but nominal observer with consequences not only for Lebanon, but for the entire eastern Mediterranean.
Time is running out, and the balance between aid and coercion will determine Lebanon’s fate in the coming years.
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