On the agenda of Friday’s Cabinet meeting is the much-debated bank restructuring project, part of the economic and financial recovery plan drawn up by the caretaker government of Prime Minister Najib Mikati.
The plan seeks to absolve the State of any responsibility for the resounding financial collapse into which official policies have plunged the country. It literally provides for aberrations, including the removal of the Central Bank’s financial commitments to banks, the immediate effect of which is the destruction of the banking sector and the elimination of bank deposits.
The State Council annulled the articles of the document relating to this measure last week, nonetheless, Mikati seems determined to press ahead with the plan.
Hezbollah and the Amal movement are vehemently opposed. Some ministers also expressed opposition to the plan, including the Minister of Education, Abbas Halabi, who announced on Thursday, on the set of Sar el-Waat program on local television, MTV, that “the plan must be re-examined.”
“I do not accept the suppression of bank deposits and the blow to the banking sector. Of course, the sector needs to be reformed, but it is essential that the State reforms itself first and deal with the waste” in the management of public finances, Halabi said.
Hosted on the same TV show, Lebanese Forces MP, Georges Adwan, lamented that “nothing has changed in the policies followed by governments since Hassan Diab’s, which made a monumental mistake by announcing Lebanon’s default, to that of Najib Mikati’s.”
Adwan stressed that the government’s plan “will destroy the banking sector, which is indispensable for promoting economic development.” “Without a healthy banking sector, how will it be possible to have growth? The proposed plan will prevent us from developing for at least 20 years, because it undermines confidence in the banks.”
He emphasized the need for the State to “determine losses and debts, because the depositors’ funds it has drawn on are a debt, not a loss”. “Once this distinction has been made, it will be possible to return the depositors’ money,” he assured.
Adwan also said that politicians and four magistrates took advantage of the devaluation of the Lebanese pound to repay at the rate of 1,500 pounds for the dollar, bank loans contracted in LL that were equal to several millions of dollars. In particular, he accused the magistrates of financial speculation, claiming that he would take the matter to court with “supporting documents”.
The MP underlined the need for the government to rethink its “wrong” approach with the International Monetary Fund (IMF), stressing that “a recovery plan must be based on sound and viable foundations and a genuine reform for bailing out the Treasury.”
Moreover, Adwan advocated management of the State’s assets, giving several examples of poorly managed services that are costing the Treasury millions of dollars. “Unfortunately, there is no will for reform, nor any chance of good governance with the existing ruling,” he said, adding that parliament will refuse the plan if the government insists on maintaining it.
