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Lebanon 24 | Noureddine Ayoub
Lebanon is going through a very strong economic decline. The situation is not the result of the current situation as described by the governors themselves, but as a result of accumulations and policies that have contributed, over the years, to the hit of the economy, and this has reinforced the fragile political and security situation that kept investors away and facilitated the looting of public funds in state institutions. And drained people’s pockets.
In light of these delicate economic conditions, and despite official assurances that the specter of bankruptcy that has recently plunged Lebanon, the government is pushing for the adoption of the 2020 budget, which is supposed to provide what the 2019 budget has failed to provide, not only as a result of poor living conditions, but also to satisfy the financiers. Cedar Conference, hoping to get those funds worth more than $ 11 billion.
Rumors targeting the banking sector?
Following the US Treasury’s decision to impose sanctions on Lebanese Canadian and Jamal Trust banks, as the two banks had a “relationship to finance” individuals in Hezbollah, not as before, rumors targeting the banking sector have increased recently. “The possibility of the US authorities targeting four Lebanese banks with new sanctions in the coming days,” forcing the President of the Association of Banks Salim Sfeir to emphasize that all the information circulating about the US escalation measures will hit Lebanese banks is false news, pointing out that this information is not true The truth is relevant. ”
Sfeir’s statement was confirmed by economist Professor Jassem Ajaka to “Lebanon 24”, putting news of the targeting of banks in the context of rumors abound at this extraordinary time, which is promoted by some and may be behind certain political goals, expressing his fear of the fate of the banking sector with reference to assurances Yesterday, the Association of Banks that there is no American desire to target the sector.
No cover for offending banks, says the economist, noting that no one can protect any bank that may violate international laws, and although the US Treasury imposed sanctions on the “Lebanese Canadian” and “Jamal Trust Bank,” but that did not affect the sector nor On the contrary, Lebanon is still receiving more deposits, which means that confidence in the banking system is strong. “If we assume the scenario of imposing sanctions on other banks, this is the biggest proof that any mistake will be dealt with and removed so as not to affect the banking system at all. And deposits. ”
Thus, the banking sector has protected itself so far, but on the other hand, “the very delicate political situation and the escalating US-Iranian conflict could affect Lebanon at any moment as the country is not isolated from this conflict,” he said. If we also assume the imposition of sanctions on Lebanon, then no doubt everyone will be affected. ”
The economist commented on Fitch’s announcement in a statement that it downgraded Byblos Bank to CCC from B- and feasibility rating (VR) to ccc from b- because of its exposure to Lebanese Treasury bonds. According to the description of the agency, saying: “In each country banks can not take a mark higher than the state mark, and if the landing of the state mark no doubt the fall of the rest of the marks” as he put it.
Because the classification is a sign of a combination of economic factors and indicators, Ajaka stresses that “the downgrade of Lebanon’s rating is not a passing news and has no impact, but a negative impact and warns investors not turnout, and the investor strongly adopts this classification to build on its projects, which negatively affects the Lebanese economy and increases the cost of financing “.
Regarding economic reforms, Ajaka asks: “Have past experiences with previous conferences succeeded in seeking reform? The answer is certainly negative.” No matter how sincere the intentions are, this is the last chance for Lebanon, either real reform and saving public finances. The abyss. ”
Some of the measures adopted by Finance Minister Ali Hassan Khalil in the 2019 budget “go in the right direction, but all these measures are absolutely insufficient and can not meet the challenges we face now, but giving the green light to spend the money” Cedar “, more related to political desire, which is available and may The challenge remains a commitment to reform, and the question is: will the deficit match what they promised in the budget?