Lebanon Erupts in Protest Again as Crisis Builds and Banks Fret

  • In World
  • 2020-01-14 17:29:04Z
  • By Bloomberg

(Bloomberg) -- Lebanese protesters spilled back into the streets on Tuesday after a brief letup, blocking major highways as they denounced the lack of a functioning government at a time of deepening financial and economic crisis.

Demonstrators used burning tires and trash to build barriers in the capital, Beirut, and across the country, blaming politicians for deteriorating living conditions. They also rallied outside the central bank headquarters.

Rudderless since Prime Minister Saad Hariri resigned in late October as moves to raise fees and taxes triggered massive anti-government protests, Lebanon is gradually succumbing to its worst economic malaise in decades.

Its currency is plumbing new lows, while the union of bank employees warned that lenders are at risk of having to close if the executive remains paralyzed.

Rallies eased after the president appointed Hassan Diab to form a new government late last year. That appeared to give officials a chance to come up with a lineup that appeased the demands of protesters, who want an administration of experts capable of avoiding a financial meltdown. But disputes among politicians have delayed the process.

Diab, a former education minister, has backed the idea of a technocratic government while President Michel Aoun and his allies are insisting on naming ministers with a political background.

'Requires Time'

Other politicians, including Parliament Speaker Nabih Berri, have demanded Hariri, who still leads a caretaker government while Diab waits in the wings, adopt new programs to address the crisis.

Aoun acknowledged Tuesday that obstacles had slowed the formation of a government that was expected to be announced last week.

"The lineup of the government must include capable people who are worthy of the people and parliament's confidence," Aoun said. "And that requires time."

A new government must secure a vote of confidence from parliament. Representatives of the International Support Group for Lebanon and the United Nations have said that a new cabinet must meet the demands of demonstrators.

Meanwhile, the union of bank employees warned that it would be forced to hold another strike if the impasse persisted. In November, bank employees walked off the job to protest their mistreatment by clients demanding the right withdraw more than their weekly cash limit.

Dollar Restrictions

"The situation is dangerous and cannot continue as such without an executive authority, and we might reach a point where we are forced to close," the MTV television channel cited the union as saying.

Read more: Lebanon Eyes Voluntary Swap of March Eurobond Into New Debt

Lebanese lenders have tightened restrictions on dollar withdrawals and transfers abroad since protests erupted against the government's decision to raise fees and taxes.

The central bank has also been rationing foreign currency and using its dwindling reserves to cover the import of essentials such as fuel and pharmaceuticals. The measures have forced traders to turn to money changers to meet their dollar needs, creating a parallel rate higher than the fixed exchange regime.

Violence has been reported on several occasions at lenders, with some people smashing ATM machines, storming into banks and holding sit-ins at branches.

To contact the reporter on this story: Dana Khraiche in Beirut at dkhraiche@bloomberg.net

To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, Paul Abelsky, Mark Williams

For more articles like this, please visit us at bloomberg.com

©2020 Bloomberg L.P.


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