BEIRUT: As Lebanon's Cabinet convened Monday for the 11th time, retired military personal orchestrated protests across several cities to voice their discontent over proposed austerity measures.
Beginning at the break of dawn, military veterans staged sit-ins and blocked roads in an attempt to pile pressure on the Cabinet and shield themselves from spending cuts targetting their end-of-service benefits.
Demonstrations took place in front of the Central Bank's offices in Hamra, Tyre, Zahleh, Tripoli, and Baalbeck with dozens of veterans gathering at each location.
Issam Fakhouri, who spoke on behalf of the protesters in Tyre, called on the government to "withdraw all articles from the draft budget that violate their rights or else.."
Lebanon's Cabinet has been holding a series of marathon sessions for over a week to hash out an austere 2019 draft budget aimed at improving the country's worsening economic situation.
Lebanon's budget deficit has ballooned to around 11 percent of GDP, or $4.5 billion, while its public debt has soared to around $85 billion, the equivalent of 150 percent of GDP.
Most notably, the budget seeks to decrease public spending by slashing public sector employees' wages by almost 25 percent, including a three percent cut to veterans’ pension payments and other benefits.
Fakhouri laid the blame at the feet of the political class "who is responsible for the country's current state of affairs" and vowed to carry on with the sit-ins until their demands are met.
Veterans have been demanding to be exempt from these cuts, with Brigadier General Fawzi Hassan urging the government "withdraws all budget items related to those who have served."
The Cabinet seeks to raise revenues by increasing tax evasion-related fines and fees associated with work permits for foreigners, according to a statement from Prime Minister Saad Hariri's office.
Another item also being proposed is raising the tax on interest paid on deposits from 7 to 10 percent, which has drawn the ire of the banking sector for fear of capital flight.
This, according to retired banker and Annahar columnist Dan Azzi, would raise around $350 million when assuming deposits of $175 billion at a weighted average interest rate of 6.6 percent.
This tax proposal would entail a 0.20 percent decrease in the interest paid on deposit, he says.
Reducing the deficit by one percent per year over the next five years is essential in official's quest to unlock the much coveted CEDRE IV soft loan package, aimed at kickstarting Lebanon's economy through investments in its infrastructure.
Having been agreed upon in Paris last year, the over $11 billion package has yet to see the light of day as it is conditional on the implementation of sectoral reforms and amendments to public finances.
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