How Bad Is Lebanon’s Economic Meltdown?

Men fill a private generator, which provide electricity with diesel oil in Beirut, Lebanon January 21, 2022. (Reuters)
Men fill a private generator, which provide electricity with diesel oil in Beirut, Lebanon January 21, 2022. (Reuters)
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How Bad Is Lebanon’s Economic Meltdown?

Men fill a private generator, which provide electricity with diesel oil in Beirut, Lebanon January 21, 2022. (Reuters)
Men fill a private generator, which provide electricity with diesel oil in Beirut, Lebanon January 21, 2022. (Reuters)

Lebanon is suffering an economic meltdown that began in 2019 when the financial system collapsed under colossal state debts and the unsustainable way they were funded, while politicians have yet to come up with a rescue plan.

Just how bad is the situation?

- Gross domestic product has plunged to an estimated $20.5 billion in 2021 from about $55 billion in 2018, the kind of contraction usually associated with wars, the World Bank says, ranking the collapse as one of the worst globally since the mid-19th century.

- The Lebanese pound has lost more than 90% of its value, driving up the cost of almost everything in a country reliant on imports, and demolishing purchasing power. A soldier's monthly wage, once the equivalent of $900, is now worth about $50.

- Poverty rates are sky-rocketing in the population of about 6.5 million, with around 80% of people classed as poor, the UN agency ESCWA says. The situation is worsening. In September, more than half of families had at least one child who skipped a meal, UNICEF has said, compared with just over a third in April.

- The financial system has suffered eye-watering losses, including about $44 billion at the central bank related to failed efforts to prop up the currency, according to 2020 government figures, a level that is roughly twice the size of economic output. Overall losses, including anticipated sovereign debt write-downs, are even bigger.

- Lebanon's banks are paralyzed. Savers have been frozen out of US dollar accounts. Withdrawals in local currency apply exchange rates that erase up to 80% of the value. During an October visit to Beirut, US official Victoria Nuland said the Lebanese people deserved to know where their money had gone.

- Reliant on imported fuel, Lebanon is facing an energy crunch. Even before the crisis, power supplies were in short supply, including in the capital. Now households are lucky to receive more than an hour or so a day. Fuel prices have soared. A ride in a shared taxi, a popular form of transport, cost 2,000 pounds before the crisis but now costs about 30,000 pounds.

- Lebanese are emigrating in the most significant exodus since the 1975-90 civil war. Believing their savings are lost, many Lebanese have no plans to return this time as they start over again.

- Among those leaving are doctors. The World Health Organization has said most hospitals are operating at 50% capacity with around 40% of doctors, mostly specialists, permanently emigrating or working part-time abroad.

- Officials and the media talk of Lebanon becoming a "failed state". Michel Aoun, the president, warned in December that the state was "falling apart". Lebanon's top Sunni cleric said after unrest over fuel shortages in August that the country risked complete collapse unless there was action.



Behind Israel’s Recovery of Last Hostage Body in Gaza

Israeli police officer Ran Gvili (Bring Them Home Now/Handout via REUTERS)
Israeli police officer Ran Gvili (Bring Them Home Now/Handout via REUTERS)
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Behind Israel’s Recovery of Last Hostage Body in Gaza

Israeli police officer Ran Gvili (Bring Them Home Now/Handout via REUTERS)
Israeli police officer Ran Gvili (Bring Them Home Now/Handout via REUTERS)

In an unexpected move, Israeli forces carried out a direct search operation to recover the body of the last Israeli hostage in Gaza, police officer Ran Gvili.

The Israeli military said on Monday it had recovered Gvili’s remains, adding that the retrieval of all hostages, living and dead, from Gaza completes a core provision of the first phase of US President Donald Trump’s plan to end the war in the enclave.

Under heavy air and artillery fire, and amid gunfire from Israeli vehicles and drones, several military bulldozers, accompanied by booby-trapped vehicles, advanced shortly after midnight between Saturday and Sunday to the west of the so-called Yellow Line, areas under Hamas control, in the al-Tuffah neighbourhood east of Gaza City.

According to eyewitnesses and field sources cited by Asharq Al-Awsat, the bulldozers later withdrew east of the Yellow Line, areas under Israeli control. Shortly afterward, three booby-trapped vehicles exploded, with the blasts heard across wide parts of the Gaza Strip.

The sources said that soon after the explosions, tanks, armoured vehicles and bulldozers, accompanied by excavation equipment, moved back into the area, specifically toward al-Batsh cemetery in al-Tuffah, west of the Yellow Line.

Sustained shelling and gunfire from vehicles and drones killed at least two Palestinians and wounded more than 25 others at different times, some critically, according to the sources.

Gaza’s civil defense has indicated that there may be additional casualties but access to them is prevented by Israeli forces.

 

Map showing the phases of withdrawal from Gaza under Trump’s plan (White House)

 

Not an Ordinary operation

Initial assessments suggested the move was a routine operation to expand the Yellow Line, similar to actions carried out in eastern Gaza City. It later emerged, however, from a statement issued by Abu Ubaida, spokesperson for the Izz ad-Din al-Qassam Brigades, Hamas’s armed wing, that the Israeli army was conducting the operation to search for the body of the last Israeli hostage, police officer Ran Gvili. This was later confirmed by the Israeli military spokesperson and by the office of Prime Minister Benjamin Netanyahu.

The announcement raised questions about the apparent shift in how Israel handled the recovery of hostages’ bodies. In previous cases, the al-Qassam Brigades had overseen such operations, including inside areas designated as Yellow Line zones and under Israeli control, in coordination with the International Committee of the Red Cross, following prior arrangements involving Hamas, mediators and Israel.

Israeli soldiers stand at the entrance of a tunnel in Rafah, Gaza Strip, December 8, 2025 (AP)

Israeli objection to al-Qassam Brigades' involvement

Field sources from Hamas told Asharq Al-Awsat that al-Qassam team, accompanied by the Red Cross, had been expected to carry out the operation. Israel, however, objected and demanded the handover of coordinates for the area where the body was believed to be located. The information was relayed through mediators, after which the Israeli operation began.

A senior political source involved in the ceasefire negotiations confirmed this information, saying Israel insisted on carrying out the operation itself. Israel cited reasons including the speed of the search, its technical capabilities to identify remains, and its ability to verify identity on site rather than recover the body for examination elsewhere.

The source said mediators supported the expedited approach that allowed Israel to extract the body directly.

According to the sources, Hamas did not have precise information on the body’s location but indicated al-Batsh cemetery, between the al-Tuffah and Shuja’iyya neighbourhoods.

This marked the second Israeli operation inside al-Batsh cemetery since the start of the Gaza war. Sources said it was the third operation to affect the site overall, where no Israeli bodies had previously been found.

Near Khalil al-Hayya’s Home

Footage released by Israeli media, taken by Israeli drones, showed machinery excavating most of the graves at the cemetery through Monday morning. Israeli army radio said more than 250 Palestinian graves had been exhumed.

The cemetery lies about 500 metres from the original Yellow Line, but successive expansions have left it only metres from the updated boundary.

Field sources told Asharq Al-Awsat that the area searched for the hostage’s body was about 30 metres from Khalil al-Hayya Street, named after the home of Hamas’s Gaza-based political leader, who is leading ceasefire negotiations. Tanks were deployed along the street and in surrounding areas to secure the forces operating at the cemetery.

How Was the Location Identified?

Previous searches for Gvili’s body, focused on the al-Zeitoun and Shuja’iyya areas, had failed. On why the search was focused on al-Tuffah, Hamas field and political sources said some fighters with indirect knowledge of the case had provided information indicating the body had, at one point, been buried in that cemetery.

They said the information could not be confirmed with high confidence because those directly involved had been killed or targeted in separate attacks or clashes during the war.

The sources suggested the information may have matched intelligence obtained by Israel’s Shin Bet security service from a Palestinian Islamic Jihad operative abducted about a month ago from Gaza City, who had links to the abduction of the Israeli police officer and the handling of his body.

The sources said Israel appeared to have information pointing to the cemetery even before Hamas relayed its own coordinates, linking the timing of the search to a decision to open the Rafah crossing, expected on Tuesday or, at the latest, Thursday.

 

Israeli soldiers in a tunnel that the army says Hamas militants used to attack the Erez crossing in northern Gaza, December 15, 2023 (AP)

Hamas Calls for Enforcement of the Agreement

Hamas spokesperson Hazem Qasim said in a statement that the recovery of the body of the last Israeli hostage in Gaza “confirms the movement’s commitment to all requirements of the ceasefire agreement, including the exchange track and its full completion in accordance with the deal.”

He reaffirmed Hamas’s commitment to all aspects of the agreement, including facilitating the work of the national committee tasked with administering Gaza, and called on mediators and the United States to compel Israel to halt violations of the agreement and implement its outstanding obligations.


Trump’s Greenland Ambitions Strain MAGA Ties with Europe’s Far-Right

 Sunlight reflects off the windows of homes set against snow covered mountains in Nuuk, Greenland, on January 24, 2026. (AFP)
Sunlight reflects off the windows of homes set against snow covered mountains in Nuuk, Greenland, on January 24, 2026. (AFP)
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Trump’s Greenland Ambitions Strain MAGA Ties with Europe’s Far-Right

 Sunlight reflects off the windows of homes set against snow covered mountains in Nuuk, Greenland, on January 24, 2026. (AFP)
Sunlight reflects off the windows of homes set against snow covered mountains in Nuuk, Greenland, on January 24, 2026. (AFP)

Tensions over US President Donald Trump's plans to take control of Greenland have driven a wedge in the once iron-clad link between MAGA and Europe's far-right.

The rift seems to signal that ideological alignment alone may not be enough to temper worries among European nationalists over Trump's interventionism abroad.

Far-right leaders in Germany, Italy and France have strongly criticized Trump's Greenland plans. Even Nigel Farage, a longtime ally of Trump and head of the Reform UK nationalist party, called Trump's Greenland moves “a very hostile act.”

During a debate Tuesday in the European Parliament, far-right lawmakers typically aligned with Trump overwhelmingly supported halting a EU-US trade pact over their uneasiness with his threats, calling them “coercion” and “threats to sovereignty."

MAGA's trans-Atlantic partners

Such a divergence between Trump and his European acolytes came as some surprise.

Far-right parties surged to power in 2024 across the European Union, rattling the traditional powers across the bloc’s 27 nations from Spain to Sweden. Their political groupings now hold 26% of the seats in the European Parliament, according to the German Institute for International and Security Affairs.

Less than a year ago, Europe's far-right parties gathered in Madrid to applauded Trump's election under the banner “Make Europe Great Again,” while Elon Musk, before his fall from Trump’s graces, had boosted European far-right influencers and figures on X, including Germany’s radical right Alternative for Germany party.

US Vice President JD Vance drew scorn from within Germany and across Europe after he met with AfD leader Alice Weidel during elections in February. The party, with which mainstream parties refuse to work, upset German politics by doubling its presence in the Bundestag to become the nation's second-largest party.

Yet deep divisions within MAGA itself over Trump’s approach to foreign affairs has reverberated in Europe, with his actions over Greenland, Venezuela and Iran forcing his political allies to favor their ideological convictions over their deference to the US president.

Sovereignty trumps shared values

France’s far-right National Rally has at times vaunted its ideological closeness to Trump, particularly on immigration.

A year ago, the party sent one of its senior figures, Louis Aliot, to attend Trump’s inauguration. In turn, Trump has staunchly defended party leader Marine Le Pen, describing her conviction for embezzling EU funds as a “witch hunt.”

Jordan Bardella, the 30-year-old National Rally’s president and a MEP, has praised Trump’s nationalist views, saying to the BBC last month that a “wind of freedom, of national pride” was blowing across Western democracies.

In recent days, however, Bardella has appeared to distance himself from the US administration. In his New Year’s address, he criticized US military intervention in Venezuela aimed at capturing then-President Nicolás Maduro, calling it “foreign interference” designed to serve “the economic interests of American oil companies.”

Going further, Bardella on Tuesday denounced Trump’s “commercial blackmail” over Greenland.

“Our subjugation would be a historic mistake,” Bardella said.

Another Trump ally, Italian Prime Minister Giorgia Meloni, echoed this sentiment. In an interview on Rai television Wednesday, she said that she told Trump during a call that his tariffs threat over Greenland was “a mistake.”

Reluctance to criticize on the EU's eastern flank

Yet the reactions among European right-wing leaders has not been lockstep. Hungarian Prime Minister Viktor Orbán, widely regarded as the trailblazer of Trump’s brand of illiberal populism, has been careful to avoid even the slightest criticism of the US president.

Facing what is likely to be the toughest election of his 16 years in power in April, Orbán has built his political identity around his affinity with Trump, promising voters that his close relationship with the president will pay hefty dividends.

Trump, Orbán has insisted, is Europe’s only hope for peace amid the war in Ukraine and a guarantor of national sovereignty.

Orbán has sought to cast Trump's threats on Greenland and capture of Maduro either as beneficial for Hungary, or none of its business.

“It’s an in-house issue ... It’s a NATO issue,” Orbán said of Trump’s plans for Greenland during a news conference earlier this month, adding that any proposed change to Greenland's sovereignty can be discussed within NATO.

Despite his staunch advocacy of national sovereignty, Orbán also praised the US action in Venezuela, calling the country a “narco state” and suggesting Maduro’s ouster could benefit Hungary through future cheaper oil prices on world markets.

Hungary’s reluctance to push back on Trump’s actions reflected similar positions among far-right leaders in the EU’s eastern flank.

Polish President Karol Nawrocki, seen as an ally of both Orbán and Trump, said in Davos this week that the tensions over Greenland should be solved “in a diplomatic way” between Washington and Copenhagen — not a broader European coalition. He called on Western European leaders to tone down their objections to Trump’s conduct.

In the neighboring Czech Republic, prime minister and Trump ally Andrej Babis has declined to speak out against the US threats to Greenland, and warned against the EU allowing the issue to cause a conflict with Trump.

In Slovakia, Prime Minister Robert Fico has remained silent on Trump’s Greenland designs, even as he met with the president in his Mar-a-Lago resort last week.

Still, Trump’s deposing of Maduro led Fico to “unequivocally condemn” the action, calling it a “kidnapping” and the “latest American oil adventure.”

Disruption or division ahead

The ideology linking MAGA and its European allies might survive recent disagreements by doubling down on old, shared grievances, said Daniel Hegedüs, Central Europe director of the German Marshall Fund.

He pointed to recent votes against Brussels’ leadership in European Parliament by far-right European lawmakers on the EU migration pact and halting the massive trade deal with the Mercosur bloc of five South American nations.

“If Trump continues that way, posing a threat to the sovereignty of European countries, then of course that will divide the European radical right,” he said.

“We don’t know whether this division will stay with us or whether they can again unite forces around issues where they can cooperate. Those issues can be damaging enough for the European Union.”


US Buildup Balances Iran Deterrence, Day-After Risks

US aircraft carrier USS Abraham Lincoln (AFP)
US aircraft carrier USS Abraham Lincoln (AFP)
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US Buildup Balances Iran Deterrence, Day-After Risks

US aircraft carrier USS Abraham Lincoln (AFP)
US aircraft carrier USS Abraham Lincoln (AFP)

As the aircraft carrier USS Abraham Lincoln, several destroyers, and fighter aircraft, are expected to arrive in the Middle East in the coming days, a familiar but increasingly pressing question is back in play: Is Washington preparing the ground for another strike on Iran, or orchestrating a calibrated show of force designed to raise the psychological and political cost for Tehran without tipping into war?

The answer is not binary. The same military buildup can serve dual purposes: a defensive deterrent to shield US bases and allies, and a pressure tool that keeps the option of attack alive without formal warning.

According to US officials cited by media outlets, the movement of the force, alongside discussions about deploying additional air defense systems, comes at a sensitive moment following a broad crackdown on protests inside Iran.

President Donald Trump, for his part, has publicly insisted that he would prefer nothing happens militarily. Still, he has tied that preference to two conditions: that Tehran does not resume any nuclear path approaching the weapons threshold, and that it does not proceed with executions of protesters.

Three messages in one buildup

The first message is directed at Iran itself. Washington wants to signal that it can rapidly reposition forces and that it considers the “deterrence window” open. Months ago, the United States struck Iranian nuclear facilities in June 2025, and Trump is now reminding Iranians that it will happen again if the same activity resumes.

The second message is aimed at allies and regional adversaries alike. The buildup is not only a threat to Tehran but also an umbrella to protect US interests and bases from potential Iranian retaliation, especially as Iran’s military leadership has openly warned that any attack would make US bases and interests legitimate targets.

Such threats are not new, but they raise the sensitivity of any US decision.

Today’s reinforcements could amount to a preemptive defense aimed at limiting losses if events spiral out of control.

The third message is domestic and political. Trump is also brandishing non-military tools such as “secondary tariffs” on countries that trade with Iran, seeking to combine pressure instruments between sanctions and military deterrence.

In January, he announced a punitive tariff mechanism targeting states that trade with Tehran.

Nuclear ambiguity

The nuclear file adds another layer of uncertainty. The International Atomic Energy Agency has not verified Iran’s stockpile of highly enriched uranium for months. At the same time, estimates circulate of a large quantity enriched to 60 percent, a level technically close to the 90 percent required for a weapon.

This monitoring gap creates two contradictory dilemmas. Hardliners argue that ambiguity implies the possibility of covert rebuilding and therefore justifies tougher pressure.

Advocates of de-escalation counter that the same ambiguity makes any strike a blind gamble that could miss targets or widen the war, without guaranteeing that the program will be halted.

From this perspective, the military buildup could become a language of negotiation: raising the cost for Tehran to accept stricter verification arrangements, or to absorb an internal retreat without appearing defeated.

The Iranian street

If a strike were carried out, what would the Iranian street gain today, after the system has already suppressed protests? Here, limited expectations appear more realistic than grand promises.

Even in Washington, there is a clear debate: any military intervention, particularly a “limited strike” against instruments of repression such as the Revolutionary Guard, may not change the outcome of an internal confrontation if the opposition is fragmented, unarmed, and unorganized.

Analyses in the US press have warned that bombing alone does not “make a revolution.”

It may temporarily halt repression, but it does not dismantle the security apparatus without a lengthy and costly campaign.

Worse, a strike could produce the opposite effect: national mobilization in favor of the system through a narrative of “external aggression,” a hardening of repression under the banner of fighting agents and terrorism, expanded arrests or harsher sentences, and an uncontrolled slide toward internal conflict if some pillars of the state break while others remain intact.

With protest momentum receding after the crackdown, and with continued restrictions on the internet and communications, the “street effect” does not appear to be at its peak in a way that would allow Trump, if he wished, to tie any strike to a quick internal political outcome.

In recent days, there have been signs of debate inside Iran about easing the shutdown. Still, the information environment remains unstable to the point that state television was hacked, and inciting messages were broadcast.

The day after

The question prompting warnings in some Washington circles is this: what if a strike were decisive and weakened the head of the system or paralyzed its center, but the state did not collapse in an orderly way? This is where the specter of “the day after” looms large.

Michael Doran, a researcher at the Hudson Institute, warns that Iran, as a multi-ethnic state with sensitive border regions, could face fragmentation or internal conflict if the center of power collapses suddenly, as in historical cases where “state identity” eroded rapidly after a regime fell.

Doran notes that minorities, Azeris, Kurds, Arabs, Baluch, and Turkmen, are concentrated along the periphery and have cross-border extensions, making neighboring states directly invested in Iran’s internal fate.

The most dangerous scenario, in this logic, is not only fragmentation but also the persistence of the system in another form: the Revolutionary Guard and security services retaining control, shedding the religious ideological cover, and adopting a nationalist or military guise.

That would amount to a change of head rather than a change of regime.

He urges avoiding the idea of “appointing a successor” for Iran from outside or presuming the shape of the state in advance, as this could inflame ethnic sensitivities and plant the seeds of early conflicts.

What has changed from previous buildups is that Washington is no longer facing only the question of “do we strike?” but also “what comes after the strike?” inside Iran and across the region. This equation makes the decision harder. A strike may satisfy the logic of deterrence. Still, it could also open doors that cannot be closed if policy is not designed around uncertainty, rather than the illusion of quick stability.