Lebanon closer to forming government as banks remain shuttered

The quest for a new Prime Minister could soon be completed after Lebanon's main political parties came to a preliminary agreement on the former finance minister to head the next government.
by Georgi Azar

15 November 2019 | 17:04

Source: by Annahar

  • by Georgi Azar
  • Source: Annahar
  • Last update: 15 November 2019 | 17:04

Anti-government protesters chant slogans against the Lebanese government as they block a main highway in Beirut on Monday. Associated Press

BEIRUT: Caretaker Foreign Minister Gebran Bassil said he expects Mohamad Safadi to be designated the next prime minister with parliamentary consultations scheduled for next week. 

Bassil's comments came during a discussion with a local TV station before he seemingly backtracked saying that "they lacked details."

The quest for a new Prime Minister could soon be completed after Lebanon's main political parties came to a preliminary agreement on the former finance minister to head the next government. 

Safadi's name gained traction after current Prime Minister Saad Hariri rejected advances to head a government that includes rival political members. On Thursday, Hariri met with top political aides to Speaker Nabih Berri and Hezbollah Secretary-General Sayyed Hasan Nasrallah. Hariri, sources say, cautiously backed Safadi and would not "veto" his designation. 

Hariri, would not, however, confirm his party's participation in the next government, casting doubt on whether he would throw his full weight behind Safadi. Despite Hezbollah and its Christian ally the Free Patriotic Movement pushing for a mixed Cabinet, tagged as a "techno-political" government, Hariri has refused to budge. He has vehemently opposed proposals to head the new Cabinet unless it would solely be comprised of independent technocrats.

Berri, sources say, is an ardent supporter of Hariri heading the government, yet his pleas seem to be falling on deaf ears.

Hariri submitted his resignation over two weeks ago after massive demonstrations, sparked by a proposed WhatsApp tax, engulfed Beirut and beyond.

Demonstrators have been calling for a complete overhaul of the country's decades-old confessional system while denouncing the ruling elite who they blame for pushing Lebanon toward the brink of a financial collapse. 

As Safadi's name began circulating, protestors were quick to rebuke Safadi's nomination, who they accuse of rampant corruption and cut from the same cloth of the ruling elite they are protesting against. 

"This is a joke, he won't make past a week," one protestor in Jal el Dib told Annahar, accusing him of taking part in shady dealings spanning several industries. 

The career politician has assumed public office on a number of occasions, serving as Minister of Public works and Transport from 2005 to 2008 and as Finance Minister in Najib Mikati's government from 2011 till 2014. 

The formation of a government is seen as the first step for Lebanon to kickstart its recovery and avoid an economic collapse not seen since the conclusion of the civil war in 1990. 

Banks have remained shuttered since late last week, citing security concerns and the lack "of a framework to ensure the safety of employees." Lebanon's bank staff union has called for employees to stay on strike to avoid confrontations with angry customers looking to withdraw their deposits.

Lebanon's banking sector was also dealt another blow Thursday after Standard & Poor downgraded some Lebanese banks in the midst of a dollar liquidity crisis and mounting pressure.

S&P downgraded Bank Audi, BLOM Bank and Bankmed's long term credit ratings to CCC from B-minus. The agency also lowered to C the short-term issuer credit rating for Bank Audi and Bankmed. It maintained CreditWatch negative on the banks.

This comes in the wake of Fitch downgrading both Bank Audi and Byblos Bank further into junk territory, while Lebanon's sovereign rating was lowered to Caa2. 

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