Hizbollah in IMF talks ahead of poll

In the FT, here

"...Lebanon's Hizbollah has held talks with the International Monetary Fund and the European Union as it seeks to secure continued financial support for Lebanon should the political alliance it leads win next month's parliamentary elections.

The discussions between the Shia militant group and donors come amid growing concern in Beirut that a politically fragile, heavily indebted economy could come under severe strain if the current pro-western parliamentary majority loses the June 7 elections.

The Beirut government has benefited from the international support of Gulf states and western governments as it has sought to curb the powers of Hizbollah. Saudi Arabia, in particular, has been a significant backer of the current government.

A victory for Hizbollah and its allies would be seen as a boost to Syria and Iran, the group's backers, and could lead the US and other supporters of the current parliamentary majority to reconsider their economic support for Lebanon. Washington considers Hizbollah a terrorist organisation but the group is seen in much of the Arab world as a resistance movement against Israel.

The pro-western coalition that dominates the government says it is confident it can maintain its parliamentary majority. But the race is tight, and a group of independents could decide which side forms the next government.

Ali Fayad, a Hizbollah candidate who also heads the party's think-tank, warned against punishing Lebanon economically if democratic elections favoured the opposition. He told the Financial Times that his party was nonetheless considering the economic risks and discussing such prospects with the IMF and the EU.

The EU says it makes no distinction between Hizbollah and other political parties in Lebanon, and will work with any democratically elected government. The EU has been providing about €60m ($84m, £53m) a year to Lebanon.

The IMF, which has an assistance programme of $114m, also says it has met Hizbollah parliamentarians and officials from its economic think-tank as part of its normal work in Lebanon. However, its financial assistance programme comes to an end soon and agreeing a new one will depend on a decision by the IMF's executive board, which includes the US.

The administration of Barack Obama has yet to make up its mind on its attitude towards Lebanon in the event of an opposition victory. But in recent weeks it has been emphasising the important role played by Michel Suleiman, the Lebanese president, who belongs to neither camp."