A concerned financial official expressed astonishment at the descent of the debate related to the economic and financial policy memorandum into threats of litigation both locally and internationally under the banner of "protecting depositors' rights." It is clear to all that the size of the financial gap exceeding $75 billion cannot realistically be placed on one party among the quartet of the state, the "central bank," the banking sector, and the depositors. Furthermore, the proposal to erase $60 billion from banks' placements at the central bank threatens to undermine the banking system and its institutions, leading to the evaporation of the majority of depositors' rights.
The official noted that the rising side arguments are generally sterile, contradicting the new directions of caretaker Prime Minister Najib Mikati, who promised to introduce amendments and suggestions that respect the principle of equitable loss distribution and to provide a refined formulation of the memorandum to the Finance and Budget Committee. Thus, "it is necessary to wait until new proposals are completed and to scrutinize their effectiveness and feasibility." It is evident that the rhetorical competition overlooks the bitter realities of the severe lack of expected solvency and the limited financial means available to the "trio" responsible for legal obligations, which consist of actual liquidity not exceeding 20 to 25 percent of deposits, failing even to meet the government's commitment to protect $100,000 from each bank account.
The internal focus on urgent constitutional government and presidential entitlements, alongside maritime border demarcation amidst entrenched disagreements, further complicates the situation and predicts additional delays in raising the final rescue file to the International Monetary Fund (IMF). This continues to foster denial and a deliberate escape from the structural and systemic reforms required as the only way out of the ongoing dramatic collapses due to a series of unprecedented local crises unique globally, which have almost undermined all economic, monetary, and financial foundations of the country, pushing over 80 percent of the population below the poverty line.
In related developments, Deputy Speaker of Parliament Elias Bou Saab chaired a meeting on Thursday with several legal experts and specialists in financial, economic, and banking matters, along with representatives from economic bodies, banks, and depositors. The aim was to gather opinions from specialists representing various concerned and effective stakeholders in the economic, financial, and legal fields, in preparation for a consultative report at the end of the meetings to facilitate the legislative process.
For his part, Chairman of Economic Bodies Mohammad Chuqair revealed the preparation of an alternative plan to the recovery plan formulated by the government, which will be presented to the Prime Minister today, Friday. He emphasized that discussions about returning depositors' funds are mere slogans unless a sovereign fund is established.
He pointed out the existence of losses amounting to $80 billion, with no one daring to bear them, while their distribution should be among the state, the Central Bank, and banks. The three parties must sit together to explore sources to cover these losses, with the foremost option being the establishment of a sovereign fund fed by the private sector's management of state facilities. This would improve revenues significantly and allow Lebanese competencies to return to work in their home country.
Chuqair predicted in a statement to the Central News Agency that President Mikati would accept the Economic Bodies' plan, as both sides agree on the principle of not burdening depositors with any amounts. He stressed the most crucial point is "restoring confidence, which is currently being achieved incrementally; if we place the entire burden on depositors, we will encounter a problem, and putting the burden solely on banks will also present a major issue, as the banking sector is the heart of the economy—there is no economy without a banking sector."
In a related context, the Secretary-General of the Banks' Association noted in an intervention that "while the state recalibrates its approach to rectify the economic recovery plan, other entities claiming to defend depositors' rights insist on bankruptcy of banks as a means to return deposits. Thus, they lose sight of the real goal." He indicated that "the government has begun to recognize its responsibilities through current amendments to its previous plan, hoping that the outcomes will meet expectations." Among the proposed amendments is the establishment of a "recovery" fund to restore deposits, reliant on various components that may suffice if accompanied by fundamental reforms at all levels. Meanwhile, he observed that some intentionally overlook any rescue plans and future resources for the state, focusing solely on the bankruptcy of banks for populist goals, as they stand at the forefront facing depositors.
