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A senior French official told Reuters that it could be difficult for banks in Lebanon to uphold the principle that depositors should not lose any of their deposits.
So it came, according to the minutes of a meeting in which France identified steps to help the crippled Lebanese banking sector.
The remarks came during talks in Paris on September 10 between senior French officials and a delegation from the Lebanese Association of Banks.
France has taken the lead in international efforts to pressure politicians clinging to their positions in Lebanon to implement the reforms needed to attract aid, alleviate a crisis that crippled the banking sector and prevented depositors from getting the most of it. of your money.
French President Emmanuel Macron’s envoy to coordinate international support for Lebanon, Pierre Duquin, said, according to the report: “While it is a matter of principle for the Lebanese Association of Banks, depositors should not suffer losses; it can be difficult. defend this to the end, but it is a matter of negotiation. ” “.
The Lebanese Central Bank and the commercial bank bankers are trying to avoid a “reduction in the value of deposits” or an official reduction of the balances held in deposit accounts.
But depositors with dollar accounts in Lebanon say they have already lost money; Because they cannot withdraw the money, or because they can only do so by converting it into Lebanese pounds at rates below market rates.
The value of the Lebanese pound, which has been pegged to the dollar for more than 20 years, collapsed during the financial crisis.
The French Foreign Ministry has not yet issued a comment.
A senior Lebanese banker who participated in the talks told Reuters that during his meetings with French officials addressing President Macron’s initiative, they felt they were supporting the prosperity of the banking sector.
A French diplomatic source said the talks were part of efforts to implement the economic roadmap for Lebanon.
In addition to the statements made by Duquesne regarding deposits, he also addressed other required measures, including the rapid implementation of capital controls and the merger of banks in a country that has 64 banks controlled by 32 groups.
And on the restructuring of the external and internal debts of Mount Lebanon, Duquesne said that a series of measures must be taken, adding that “there is no magic solution.”
The minutes of the meeting showed that representatives from the Lebanese Association of Banks, including the Association’s president, Salim Sfeir, said that the banks were ready to join “collective efforts” to resolve the crisis and identified proposals that included support for establish a fund to mobilize state assets.
Lebanon is facing a severe economic and financial crisis that represents the greatest threat to its stability since the civil war that broke out between 1975 and 1990, and the crisis was exacerbated by a devastating explosion in the port of Beirut on 4 August.
France is pressuring divided politicians to form a new government to begin reforming the country that suffers from rampant corruption but has already passed a deadline that they agreed with Paris on Tuesday to form a new government.
And French Foreign Minister Jean-Yves Le Drian said last month that Lebanon was in danger of disappearing without the necessary reforms.
Prime Minister-designate Mustafa Adib is trying to form a government to implement the reforms mentioned in the French roadmap.
Sources say he seeks to negotiate control of the ministries, many of which have been subject to the same factions for years.
But senior Shiite and Christian politicians in the sectarian power-sharing system complained that Adeeb, a Sunni, did not consult them.
The most prominent objections came from the Shiite politician Nabih Berri, president of Parliament and ally of the Shiite group Hezbollah, and Berri insists on appointing the finance minister, a position he has decided since 2014.
Sources say Hezbollah supports Berri’s position, and that it informed President Michel Aoun on Tuesday that the Shiite parties must agree with the Shiite ministers, and that the finance minister must be Shiite.
Former Prime Minister Saad Hariri, whose support was decisive for Adeeb’s candidacy, said that the Finance Ministry and other ministerial portfolios are not the exclusive right of any sect.
The Ministry of Finance and other ministerial portfolios are not the exclusive right of any sect, and the refusal to rotate is a frustration and a violation of the right of last resort to save Lebanon and the Lebanese.
– Saad Hariri (@saadhariri) September 16, 2020
Hariri said on Twitter that rejecting the idea of a rotating check on ministries thwarted “the last chance to save Lebanon and the Lebanese,” referring to the French initiative.
Free Patriotic Movement deputy Simon Abi Ramia said on Twitter that Lebanon faces a decisive 24 hours. Either “the logic of reason wins out” and a government is being formed or the prime minister apologizes.
France also asked Lebanese politicians to “assume their responsibilities”, expressing their “regret” for not respecting the promises made during President Emmanuel Macron’s visit to form a government “within 15 days”, as announced by the French presidency.
The Elysee Palace declared: “It is not too late for everyone to assume their responsibilities only for the good of Lebanon and allow Prime Minister Mustafa Adib to form a government that is as dangerous as the situation.”
“We are following the situation with interest and we continue our contacts with Lebanese officials to renew this urgent message,” the presidency said.
Macron confirmed, during a visit to Lebanon on September 1, that he had obtained political guarantees to form a government within 15 days, and explained that he expected a government supported by “all political parties” capable of implementing reforms.
But since then negotiations for Mustafa Adib, the former ambassador unknown to many, have failed.
“We note today that they are not on the date set for today. France regrets that Lebanese politicians have not fulfilled the promises they made to President Macron on September 1, according to the announced schedule,” added the Elysee.
The presidency stated that on that day, “all Lebanese politicians pledged that the rescue government could implement an urgent reform program that meets the needs of Lebanon and the aspirations of Lebanese and Lebanese women.”
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