On Tuesday, Prime Minister Najib Mikati declared that the Lebanese authorities have no plans to “undermine the banking sector.”
He assured during a meeting with a delegation from the Association of Banks in Lebanon that the main priority of the Lebanese government’s economic approach is to preserve the rights of depositors.
“The recovery plan gives priority to preserving people’s rights, reviving all productive sectors, and also preserving the banking sector, which represents an essential element for economic recovery,” he stressed.
He added that “everything being said about the elimination of depositors’ rights and the undermining of the banking sector is aimed at stirring confusion and tension.”
Since 2019, Lebanese and non-Lebanese depositors have been paying the heavy price of the banks enforcing capital control that has restricted withdrawals to a minimum and locked many out of their bank accounts, among other hardships.
It is only recently, in March of this year, that the Lebanese Cabinet finally decided to approve an official capital control law that could regulate the conditions and have the government work out a solution for the financial and economic crisis.
It remains that such a law must be properly studied and managed by the right experts to avoid its negative consequences on the already crippled economy.
The government’s decision to approve the capital control law came under the pressure of the demands of the International Monetary Fund (IMF), which is one of the main reforms IMF requires from Lebanon in order to provide it with financial help.
Despite the involved urgency, Lebanon has taken some two years as well with its negotiations with the IMF, mainly due to the demanded reforms and the resistance by the Central Bank to submit all the required documents.
It is only recently, in April, that a deal was finally made for the IMF support. However, it is still at the “staff level”, and subject to approval if Lebanon implements the necessary reforms and actions that the international “partners” are asking for as a term for financial support.
IMF called on Lebanese authorities to initiate a “multi-pronged reform program to tackle these challenges, bring back confidence, and put the economy back on a sustainable growth path.”