Lebanese banks face threats, Hariri said to want neutral government

By Tom Arnold and Tom Perry BEIRUT (Reuters) - Lebanese bank staff are facing abuse from customers angered by restrictions on access to their cash, the employees' union said on Friday, reflecting intensifying pressures in an economy gripped by its deepest crisis since the 1975-90 civil war. With Lebanon paralysed by political and economic turmoil, its politicians have yet to make progress towards agreeing a new government to replace one that was toppled by an unprecedented wave of protests against the sectarian ruling elite. Saad al-Hariri, who quit as prime minister last week, is determined the next government should be devoid of political parties because such a cabinet will not be able to secure Western assistance, a source familiar with his view said

Reuters November 09, 2019 00:10:29 IST
Lebanese banks face threats, Hariri said to want neutral government

Lebanese banks face threats Hariri said to want neutral government

By Tom Arnold and Tom Perry

BEIRUT (Reuters) - Lebanese bank staff are facing abuse from customers angered by restrictions on access to their cash, the employees' union said on Friday, reflecting intensifying pressures in an economy gripped by its deepest crisis since the 1975-90 civil war.

With Lebanon paralysed by political and economic turmoil, its politicians have yet to make progress towards agreeing a new government to replace one that was toppled by an unprecedented wave of protests against the sectarian ruling elite.

Saad al-Hariri, who quit as prime minister last week, is determined the next government should be devoid of political parties because such a cabinet will not be able to secure Western assistance, a source familiar with his view said.

He is still seeking to convince the powerful, Iran-backed Shi'ite group Hezbollah and its ally the Amal Movement of the need for such a technocratic government, the source said. Hariri's office could not immediately be reached for comment.

Leading Christian politician Samir Geagea warned of great unrest if supplies of basic goods run short and said Lebanon's financial situation was "very, very delicate".

One of the world's most heavily indebted states, Lebanon was already in deep economic trouble before protests erupted on Oct. 17, ignited by a government plan to tax WhatsApp calls.

Taking aim at rampant state corruption, the nationwide protests have targeted the entire elite.

Since reopening a week ago, banks have been seeking to stave off capital flight by blocking most transfers abroad and imposing curbs on hard-currency withdrawals, though the central bank has announced no formal capital controls.

The banks' moves have led to threats against their staff.

"Clients with guns have entered banks and security guards have been afraid to speak to them as when people are in a state like this you don’t know how people will act," said George al Hajj, president of the Federation of Syndicates of Banks Employees.

Bank staff are considering going on strike, he said.

"Clients are becoming very aggressive; the situation is very critical and our colleagues cannot continue under the current circumstances," added Hajj, whose union has around 11,000 members, just under half of the total banking staff.

A senior banker expressed concern that potential industrial action by staff could force the closure of banks from Tuesday onward. Banks will be closed on Saturday and Monday for a public holiday.

A big part of Lebanon's economic crisis stems from a slowdown of capital inflows which has led to a scarcity of U.S. dollars and spawned a black market where the Lebanese pound has weakened below its official pegged rate.

A dollar was costing 1,800 pounds or more on Friday compared to 1,740 on Thursday, two market sources said. The pegged rate is 1,507.5 pounds.

"ON ANOTHER PLANET"

Some banks have lowered the cap on maximum withdrawals from dollar accounts this week, according to customers and bank employees. At least one bank cut credit card limits from $10,000 to $1,000 this week, customers said.

"Anything that touches the liquidity of the bank is being restricted," said another banker. One bank told a customer that a weekly withdrawal cap of $2,500 had been slashed to $1,500.

Friday also saw the longest queues yet at ATMs, the senior banker said, as customers prepared for the two-day closure.

In central Beirut, several people tried and failed to withdraw dollars from an ATM belonging to one of the banks that is still dispensing dollars from its cash machines.

"It's frustrating as I need money to keep me going for the weekend," said one customer, a 25-year-old marketing professional. Another customer was able to withdraw cash in Lebanese pounds from the same ATM.

Hariri, who resigned on Oct. 29, has been holding closed-door meetings with other politicians.

"Hariri has made up his mind. He does not want a government with any politicians because this government cannot secure support from the West," the source familiar with his view said.

Geagea, head of the Lebanese Forces Party, said the only way out of the crisis was the formation of a competent government independent of political parties.

"Every hour we hear of a crisis at the gates, whether it's (supply of) petrol, flour, or medicine," Geagea said in a telephone interview. "Everything is collapsing and the officials are on another planet, taking their time."

(Additional reporting by Laila Bassam, Ellen Francis and Nadine Awadallah; Writing by Tom Perry; Editing by Mark Heinrich)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.