Lebanese President Aoun Fears Chaos as Crisis Bites

Lebanon's President Michel Aoun speaks during a news conference at the presidential palace in Baabda, Lebanon October 21, 2020. (Dalati & Nohra)
Lebanon's President Michel Aoun speaks during a news conference at the presidential palace in Baabda, Lebanon October 21, 2020. (Dalati & Nohra)
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Lebanese President Aoun Fears Chaos as Crisis Bites

Lebanon's President Michel Aoun speaks during a news conference at the presidential palace in Baabda, Lebanon October 21, 2020. (Dalati & Nohra)
Lebanon's President Michel Aoun speaks during a news conference at the presidential palace in Baabda, Lebanon October 21, 2020. (Dalati & Nohra)

Lebanon’s President Michel Aoun said on Wednesday the country could face chaos before it can recover from a financial meltdown.

Crushed under a mountain of debt and decades of graft, Lebanon has plunged into its worst crisis since the 1975-1990 civil war.

Aoun, a former army commander, and Saad al-Hariri, a three-time premier who was designated prime minister in October, have been locked in a standoff over the makeup of a new cabinet as the crisis worsens.

Scenes of shoppers brawling over goods, protesters blocking roads, and shuttered businesses are now commonplace.

“I will hand over the country better than when it was handed to me ... but I fear the cost will be very high, ‮)‬there‮(‬ may be chaos before that,” Aoun said in comments published by Lebanese television channel al-Jadeed. Aoun’s term expires in 2022.

The president, whose party run by his son-in-law Gebran Bassil leads the biggest bloc in parliament, told a reporter at al-Jadeed he feared the dangers looming over Lebanon threatened its very existence.

The currency has lost most of its value, making more than half the population poor. Last August’s port blast, which devastated parts of Beirut and killed 200 people, deepened the country’s misery.

The deadlock has persisted since Aoun warned in September that the country was going “to hell” without a new government.

Foreign donors have made clear they will not bail out Lebanon before its leaders agree a new cabinet that must launch reforms.

“I wish I inherited my grandfather’s orchard and didn’t take up the presidency,” Jadeed cited Aoun as saying on Wednesday.



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.