Ahmadinejad assures Assad Iran is taking nuclear talks seriously

President Mahmoud Ahmadinejad on Sunday told visiting Syrian President and staunch regional ally BasharAssad that Tehran was serious about finding a practical solution to the nuclear crisis.

"We are serious in talks and we want the talks to be based on the law so it will bear practical results. We hope that other sides are serious too," Ahmadinejad told Assad in remarks broadcast live on staterun television.

On Saturday evening Ahmadinejad was quoted as telling his Syrian counterpart that Tehran "will not give up an inch on its nuclear rights."

His comments coincide with this weekend's US deadline for Iran to respond to an international package of incentives for it to freeze its drive to enrich uranium amid warnings of new sanctions if it does not.

After meeting Iran's nuclear negotiator Saeed Jalili on July 19 in Geneva, EU foreign policy chief Javier Solana asked for a response in two weeks, but "if it's in 16 days instead of 14 it's not a problem. We are not obsessed with a date," an EU diplomat said earlier on condition of anonymity.

The Syrian leader's visit fol lows a trip to Paris a month ago during which French President Nicolas Sarkozy urged Syria to "persuade Iran" to prove that it is not seeking nuclear weapons.

"When we were in France we told them about the Syrian position on Iran's nuclear issue but they asked us if we have details of the Iranian program," Assad said on Sunday in Arabic through a translator.

"On this trip we got details, so in the future if we are asked again we know Iran's position." Iran has so far been slapped by three sets of Security Council resolutions demanding that it halt uranium enrichment. This process to produce fuel for nu clear power plants can also be used to make the fissile core of an atomic bomb if refined to significantly higher levels.

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Beirut must be weaned off local banks – Bassil

Lebanese banks need to lower their lending to the government and focus more on the private sector in order to achieve good growth, the head of the Associations of Banks in Lebanon said on Monday.

"We have been financing the public for a long time and I think it is time for the government to tap other markets," Francois Bassil told The Daily Star in an exclusive interview.

Lebanese banks hold over 54 percent of Lebanon's public debt, which now stand at more than $43.5 billion, or 176 percent of the country's GDP.

Bassil said that this ratio of lending to the state is extremely high by any standard.

"If we look at other countries the total bank loans to governments do not even exceed 20 percent of their loan portfolio and the rest goes to the private sector," he said.

But the outgoing Lebanese government under Premier Fouad Siniora succeeded in securing massive cash injection from the donor countries that met in Paris in January 2007.The donor states pledged $7.6 billion in soft loans and grants to Lebanon to reduce the country's debt-servicing costs and finance some infrastructure projects.

Thanks to this cash injection, the Finance Ministry was able to secure funds for the rest of 2008.

In February 2008 the Finance Ministry had little raising $885 million in Euro bonds to roll over existing loans.As usual, the Lebanese banks were the main subscribers for this issue.

Bassil said that if the next government secured billions of dollars from the privatization of the telecommunications sector, the state would not have any difficulty in tapping international markets for fresh loans.

"We don't want to stop completely lending the government but this pattern needs to change gradually over time," he said.

He added that the government may have a hard time financing outstanding debts in foreign currency in 2009 if economic reforms and the privatization of the cellular networks do not materialize this year.

The private sector has complained in the past that the government is unfairly competing with it for loans from commercial banks.

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Bush, Sarkozy pressure Syria over Lebanon

The United States and France on Saturday jointly called on Syria to establish "friendly" diplomatic ties with Lebanon.

A joint statement following talks in Paris between President George W. Bush and President Nicolas Sarkozy called on the two countries to "quickly establish full diplomatic relations" based on "respect, equality, security and sovereignty."

Syria, the former power broker in Lebanon, withdrew its troops in 2005 in the aftermath of the assassination of former Lebanese Prime Minister Rafik Hariri, ending a military presence of nearly three decades.

The absence of formal diplomatic relations between Lebanon and Syria is seen by some Lebanese as a sign of Syrian designs on their country.

The United States and France also called for "supporting the international investigation and creation of a special tribunal" to try the perpetrators of Hariri's assassination.

Syrian President Bashar alAssad earlier this month said Damascus was ready to open an embassy in Lebanon once a unity government is formed and develops good relations with Syria.

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