Lebanon's Caretaker PM Pleads for a New Govt as Protests Continue

Lebanon's caretaker Prime Minister Hassan Diab speaks at the government palace in Beirut, Lebanon March 6, 2021. (Dalati & Nohra)
Lebanon's caretaker Prime Minister Hassan Diab speaks at the government palace in Beirut, Lebanon March 6, 2021. (Dalati & Nohra)
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Lebanon's Caretaker PM Pleads for a New Govt as Protests Continue

Lebanon's caretaker Prime Minister Hassan Diab speaks at the government palace in Beirut, Lebanon March 6, 2021. (Dalati & Nohra)
Lebanon's caretaker Prime Minister Hassan Diab speaks at the government palace in Beirut, Lebanon March 6, 2021. (Dalati & Nohra)

Lebanon’s caretaker Prime Minister Hassan Diab threatened on Saturday to stop performing his duties to pressure politicians to form a new government, citing an incident in which shoppers fought over milk to illustrate the parlous state of the economy.

Diab’s cabinet resigned on the back of the Aug. 4 Beirut port explosion that devastated swathes of the capital. Prime minister-designate Saad al-Hariri was nominated in October but has failed to form a new cabinet since due to political deadlock between him and President Michel Aoun.

An ongoing financial crisis, which erupted in 2019, has wiped out jobs, raised warnings of growing hunger and locked people out of their bank deposits. A new cabinet could implement reforms needed to trigger billions of dollars of international aid.

“If seclusion helps with cabinet formation then I am ready to resort to it, although it goes against my convictions for it disrupts the entire state and is detrimental to the Lebanese,” Diab said in a televised speech.

“Doesn’t the scramble for milk constitute a sufficient incentive to transcend formalities and roughen out the edges in order to form a government?” Diab said referring to the recent incident at a Beirut supermarket in which shoppers fought over powdered milk.

A video of the squabble went viral on social media, leaving many people shocked at the desperate state of the economy.

Groups of protesters have been burning tires to block roads across the country on a daily basis since the Lebanese currency tumbled to a new low on Tuesday, enraging a population long horrified by the country’s financial meltdown.

The collapse of the Lebanese pound, which fell to 10,000 to the dollar on Tuesday, was the last straw for many who have seen prices of consumer goods such as diapers and cereals nearly triple since the financial crisis erupted.

On Saturday demonstrators protested in front of the banking association, demanding access to their deposits, and then walked to the parliament building in downtown Beirut to express their frustration at the deteriorating economic conditions.

“Social conditions are aggravating, financial conditions are putting a severe strain on the country, political conditions are increasingly complex,” Diab added in his speech.

“The country is confronted with enormous challenges that a normal government cannot face without political consensus so how can a caretaker government face these challenges?”



Lebanon Bans Dealing with Hezbollah Financial Entity

A view shows Lebanon's Central Bank building in Beirut, Lebanon April 4, 2025. REUTERS/Mohamed Azakir/File Photo
A view shows Lebanon's Central Bank building in Beirut, Lebanon April 4, 2025. REUTERS/Mohamed Azakir/File Photo
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Lebanon Bans Dealing with Hezbollah Financial Entity

A view shows Lebanon's Central Bank building in Beirut, Lebanon April 4, 2025. REUTERS/Mohamed Azakir/File Photo
A view shows Lebanon's Central Bank building in Beirut, Lebanon April 4, 2025. REUTERS/Mohamed Azakir/File Photo

Lebanon's central bank has banned banks and brokerages from dealing with a Hezbollah-affiliated financial institution, according to a circular, a sign of the group's diminished sway over state affairs since its devastating war with Israel.

Keeping up military pressure on the Iran-backed group, Israel on Tuesday launched some of its heaviest airstrikes since a ceasefire in November, saying it hit training camps and weapons depots in east Lebanon. A security source in Lebanon said 12 people were killed, five of them Hezbollah fighters, Reuters reported.

Hezbollah has faced mounting pressures since the war, including financial ones.

In the circular, dated July 14 and reviewed by Reuters, Banque du Liban prohibited all licensed financial institutions in Lebanon from dealing directly or indirectly with unlicensed entities and listed Hezbollah's Al-Qard Al-Hassan as an example.

The US Department of Treasury imposed sanctions on Al-Qard Al-Hassan in 2007, saying Hezbollah used it as a cover to manage "financial activities and gain access to the international financial system".

Bolstered by its powerful arsenal, Hezbollah had long exercised decisive influence over Lebanese state affairs, but it was unable to impose its will in the formation of a post-war government in February.

Al-Qard Al-Hassan, founded in 1983, describes itself as a charitable organisation which provides loans to people according to Islamic principles that forbid interest. Israel struck some of its branches during its war with Hezbollah last year.

Operating as a not-for-profit organisation under a licence granted by the Lebanese government, it has more than 30 branches, mostly in southern Lebanon and the Bekaa Valley.

SHADOW ECONOMY

A Lebanese official said the central bank move had been in the works for months, and reflected US pressure on Lebanon to take action against Hezbollah's financial wing.

Nassib Ghobril, chief economist at Byblos Bank, said Lebanese banks were already careful to avoid dealing with Al-Qard Al-Hassan because it is under US sanctions.

"The important point is that finally the authorities are addressing the shadow economy in Lebanon, which is the real problem," he said, adding that authorities had long failed to address its "toxic effects".

In June, the European Commission included Lebanon in an updated list of high-risk jurisdictions presenting strategic deficiencies in their national anti-money laundering and countering the financing of terrorism.

Last year, global financial crime watchdog FATF placed Lebanon on its "grey list" of countries under special scrutiny.