Tensions with Israel further compound Lebanon's economic woes

The latest skirmish, which comes against the backdrop of flaring regional pressures, was met with a sharp rebuke from top Lebanese officials.
by Georgi Azar

27 August 2019 | 19:15

Source: by Annahar

  • by Georgi Azar
  • Source: Annahar
  • Last update: 27 August 2019 | 19:15

The Hezbollah leader Hassan Nasrallah vowed in a speech on Sunday that Hezbollah fighters would seek to bring down any Israeli drones in Lebanon. (Bilal Hussein/Associated Press)

BEIRUT: In the midst of rising tensions with Israel, Lebanese officials from across the board condemned the latest transgressions as concerns over the small Mediterranean country's finances continue to rumble on. 

The Israeli attacks come against the backdrop of flaring regional tensions between Iran and Israel.

This pushed the cost of insuring exposure to Lebanon's sovereign debt to a record high on Tuesday, with Lebanon's five-year credit default swaps (CDS) rising to 1,205 basis points (bps), up 9 bps from Monday's close.

The setback also comes at the heels of credit rating agency Fitch downgrading Lebanon's Eurobonds to triple C while Standard and Poor maintained its B- rating. 

President Michel Aoun labeled Israel's violation of UN resolution 1701 as a "declaration of war," while Prime Minister Saad Hariri warned of the unforeseen circumstances that risk amounting. 

"We stand by President Michel Aoun's words," Finance Minister and Speaker Nabih Berri's ally Ali Hassan Khalil said Tuesday. 

Hariri's comments came during a telephone conversation with Russian Foreign Minister Sergei Lavrov, describing Israel's moves as a “dangerous act, an attack against Lebanon's sovereignty and a violation of resolution 1701, which established calm and stability over the past years.”

The premier also called on Russia to interfere and put a stop to Israel's "continued violations of Lebanese sovereignty." Meanwhile, Russia “reaffirmed its commitment to the sovereignty, independence, territorial integrity and stability of Lebanon," before reiterating the need to respect the "United Nations Security Council Resolution 1701, which ended the July 2006 war between Hezbollah and Israel."

The attack on a Palestinian position on the Lebanese-Syrian border, coupled with the crash of two Israeli reconnaissance drones over Beirut, has brought to the forefront fears of a possible confrontation between Israel and the Iranian-backed militant group Hezbollah.  

Speaking to his followers in the wake of Sunday's infractions, Hezbollah leader Hassan Nasrallah issued Israel a warning, pledging to retaliate against further Israeli attacks. 

He said his group will confront and shoot down any Israeli drones that enter Lebanese airspace after two UAVs crashed over the southern Beirut suburb of Dahyeh, a popular Hezbollah stronghold. 

“I tell Israeli soldiers on the border (with Lebanon) to be cautious and wait. Maybe in a day or two or three or four... do not think for a moment that Hezbollah will allow such matters to pass,” he added.

Reuters, quoting two sources close to Hezbollah, said Tuesday that the group is preparing a “calculated strike” against Israel in response to what transpired over the weekend. 

A reaction “is being arranged in a way which wouldn’t lead to a war that neither Hezbollah nor Israel wants,” one of the sources told Reuters. “The direction now is for a calculated strike, but how matters develop, that’s another thing.”

Nasrallah's comments prompted Israeli Prime Minister Benjamen Netanyahu to follow suit, telling the Hezbollah leader to "calm down."

"I heard what Nasrallah said. I suggest to Nasrallah to calm down. He knows well that Israel knows how to defend itself and to pay back its enemies," Netanyahu said in a speech. 

Lebanon is expected to file a complaint with the United Nations Security Council, Information Minister Jamil Jarrah said Tuesday at the conclusion of a Cabinet session. 

Israel and Hezbollah last fought a month-long war in the summer of 2006, which brought destruction to much of Lebanon's infrastructure and the near decimation of the stronghold of Dahyeh. 

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