People walk outside Lebanon's Central Bank in Beirut November 6, 2014. REUTERS/Jamal Saidi
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Lack of reforms, political instability and slow economic growth is leaving the embattled government with very few options to finance its current expenditure needs, economists and bankers said Wednesday.One of these options, if not the only one, is to keep borrowing from the Lebanese banks and the Central Bank, which are already sitting on a large chunk of Eurobonds and treasury bills. However, there is a deep concern that this trend will sink Lebanon deeper into political and economic uncertainty, not to mention the chances of a further downgrade of the country by the international rating agencies.Last week, the Finance Ministry successfully closed a $1.3 billion Eurobond deal which was mostly snapped up by Lebanese banks and financial institutions. Sarrouh feared that the budget deficit next year would reach $5 billion. He added that banks have no choice but to help the government meet its financial needs. Parliament Speaker Nabih Berri has called for legislative sessions next week to discuss and approve a number of bills, including $600 million worth of grants and loans from the World Bank.
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