Lebanon Recovery Plan Includes Central Bank Debt Write-Off, Haircuts to Depositors

Lebanese President Michel Aoun heads a final cabinet meeting before the government enters a caretaker status at the presidential palace in Baabda, Lebanon May 20, 2022. (Dalati & Nohra)
Lebanese President Michel Aoun heads a final cabinet meeting before the government enters a caretaker status at the presidential palace in Baabda, Lebanon May 20, 2022. (Dalati & Nohra)
TT

Lebanon Recovery Plan Includes Central Bank Debt Write-Off, Haircuts to Depositors

Lebanese President Michel Aoun heads a final cabinet meeting before the government enters a caretaker status at the presidential palace in Baabda, Lebanon May 20, 2022. (Dalati & Nohra)
Lebanese President Michel Aoun heads a final cabinet meeting before the government enters a caretaker status at the presidential palace in Baabda, Lebanon May 20, 2022. (Dalati & Nohra)

Lebanon's government foresees cancelling "a large part" of the Central Bank's foreign currency obligations to commercial banks and dissolving non-viable banks by November, according to a financial recovery plan passed by the cabinet on Friday.

The document, seen by Reuters and verified as accurate by a minister, was passed by cabinet in its final session hours before losing decision-making powers, following the election of a new parliament on May 15.

It includes several measures that are prerequisites to unlock funds from a preliminary deal with the International Monetary Fund agreed in April that could help pull the country out of a three-year financial meltdown.

The plan foresees a full audit of the Central Bank's forex financial standing by July. Then, the government "will cancel, at the outset, a large part of the Central Bank's foreign currency obligations to banks in order to reduce the deficit in BDL's capital," the document said.

The largest 14 commercial banks, representing 83% of total assets, would also be audited. Viable banks would be recapitalized with "significant contributions" from bank shareholders and large depositors.

The plan said it would protect small depositors "to the maximum extent possible" in each viable bank, but did not lay out a minimum amount to be protected - unlike draft plans.

Non-viable banks, however, would be dissolved by the end of November, it added.

It also said the government would unify the official exchange rate, ending a system in which the government offered various exchange rates for different operations.

Lebanon's local currency has lost more than 90% of its value since its economic decline began in 2019.

In April 2020, Lebanon's cabinet endorsed a recovery plan that was then torpedoed by powerful political parties, the Central Bank, and commercial banks, who disputed the distribution of losses.

This April, the Association of the Banks in Lebanon (ABL) rejected a draft government recovery plan that it said would leave banks and depositors shouldering the "major portion" of a government-estimated $72 billion hole in the financial sector.

A spokesman for the association said it "did not meet yet to discuss the decision of the government, therefore ABL still endorses its last statement in this regards."

Lebanon's banks have been major lenders to the government for decades, helping to finance a wasteful and corrupt state that tipped into financial meltdown in 2019.



Gaza's Rafah Crossing Reopens, Allowing Limited Travel as Palestinians Claim Delays, Mistreatment

Ayada Al-Sheikh is welcomed by his sister, Nisreen, upon his arrival in Khan Younis in the southern Gaza Strip after returning to Gaza following the long-awaited reopening of the Rafah border crossing, early Thursday, Feb. 5, 2026. (AP Photo/Abdel Kareem Hana)
Ayada Al-Sheikh is welcomed by his sister, Nisreen, upon his arrival in Khan Younis in the southern Gaza Strip after returning to Gaza following the long-awaited reopening of the Rafah border crossing, early Thursday, Feb. 5, 2026. (AP Photo/Abdel Kareem Hana)
TT

Gaza's Rafah Crossing Reopens, Allowing Limited Travel as Palestinians Claim Delays, Mistreatment

Ayada Al-Sheikh is welcomed by his sister, Nisreen, upon his arrival in Khan Younis in the southern Gaza Strip after returning to Gaza following the long-awaited reopening of the Rafah border crossing, early Thursday, Feb. 5, 2026. (AP Photo/Abdel Kareem Hana)
Ayada Al-Sheikh is welcomed by his sister, Nisreen, upon his arrival in Khan Younis in the southern Gaza Strip after returning to Gaza following the long-awaited reopening of the Rafah border crossing, early Thursday, Feb. 5, 2026. (AP Photo/Abdel Kareem Hana)

A limited number of Palestinians were able to travel between Gaza and Egypt on Sunday, after Gaza's Rafah crossing reopened after a two-day closure, Egyptian state media reported.

The vital border point opened last week for the first time since 2024, one of the main requirements for the US-backed ceasefire. The crossing was closed Friday and Saturday because of confusion about reopening operations.

Egypt's Al Qahera television station said that Palestinians began crossing in both directions around noon on Sunday. Israel didn't immediately confirm the information, according to The AP news.

Meanwhile, Israeli Prime Minister Benjamin Netanyahu is expected to travel to Washington this week, though the major subject of discussion will be Iran, his office said.

Over the first four days of the crossing's opening, just 36 Palestinians requiring medical care were allowed to leave for Egypt, plus 62 companions, according to UN data, after Israel retrieved the body of the last hostage held in Gaza and several American officials visited Israel to press for the opening.

Palestinian officials say nearly 20,000 people in Gaza are seeking to leave for medical care that isn't available in the territory. Those who have succeeded in crossing described delays and allegations of mistreatment by Israeli forces and other groups involved in the crossing, including an Israeli-backed Palestinian armed group, Abu Shabab.

A group of Palestinian patients and wounded gathered Sunday morning in the courtyard of a Red Crescent hospital in Gaza’s southern city of Khan Younis, before making their way to the Rafah crossing with Egypt for treatment abroad, family members told The Associated Press.

Amjad Abu Jedian, who was injured in the war, was scheduled to leave Gaza for medical treatment on the first day of the crossing’s reopening, but only five patients were allowed to travel that day, his mother, Raja Abu Jedian, said. Abu Jedian was shot by an Israeli sniper while he doing building work in the central Bureij refugee camp in July 2024, she said.

On Saturday, his family received a call from the World Health Organization notifying them that he is included in the group that will travel on Sunday, she said.

“We want them to take care of the patients (during their evacuation),” she said. “We want the Israeli military not to burden them.”

The Israeli defense branch that oversees the operation of the crossing didn't immediately confirm the opening.

Heading back to Gaza A group of Palestinians also arrived Sunday morning at the Egyptian side of the Rafah crossing to return to the Gaza Strip, Egypt’s state-run Al-Qahera News satellite television reported.

Palestinians who returned to Gaza in the first few days of the crossing's operation described hours of delays and invasive searches by Israeli authorities and Abu Shabab. A European Union mission and Palestinian officials run the border crossing, and Israel has its screening facility some distance away.

The crossing was reopened on Feb. 2 as part of a fragile ceasefire deal to halt the Israel-Hamas war.

The Rafah crossing, an essential lifeline for Palestinians in Gaza, was the only one in the Palestinian territory not controlled by Israel before the war. Israel seized the Palestinian side of Rafah in May 2024, though traffic through the crossing was heavily restricted even before that.

Restrictions negotiated by Israeli, Egyptian, Palestinian and international officials meant that only 50 people would be allowed to return to Gaza each day and 50 medical patients — along with two companions for each — would be allowed to leave, but far fewer people have so far crossed in both directions.

A senior Hamas official, Khaled Mashaal, said the militant group is open to discuss the future of its arms as part of a “balanced approach” that includes the reconstruction of Gaza and protecting the Palestinian enclave from Israel.

Mashaal said the group has offered multiple options, including a long-term truce, as part of its ongoing negotiations with Egyptian, Qatari and Turkish mediators.

Hamas plans to agree to a number of “guarantees,” including a 10-year period of disarmament and an international peacekeeping force on the borders, “to maintain peace and prevent any clashes,” between the militants and Israel, Mashaal said at a forum in Qatar’s capital, Doha.

Israel has repeatedly demanded a complete disarmament and destruction of Hamas and its infrastructure, both military and civil.

Mashaal accused Israel of financing and arming militias, like the Abu Shabab group which operates in Israeli military-controlled areas in Gaza, “to create chaos” in the enclave.

In the forum, Mashaal was asked about Hamas’ position from US President Donald Trump’s Board of Peace. He didn’t offer a specific answer, but said that the group won’t accept “foreign intervention” in Palestinian affairs.

“Gaza is for the people of Gaza. Palestinians are for the people of Palestine,” he said. “We will not accept foreign rule.”


Three Deadly Attacks on Health Centers in Sudan's South Kordofan in Past Week, Says WHO

Sudanese families prepare to ride on trucks while on their way to Egypt through the Qustul border, after the crisis in Sudan's capital Khartoum, in the Sudanese city of Wadi Halfa, Sudan May 1, 2023. (Reuters)
Sudanese families prepare to ride on trucks while on their way to Egypt through the Qustul border, after the crisis in Sudan's capital Khartoum, in the Sudanese city of Wadi Halfa, Sudan May 1, 2023. (Reuters)
TT

Three Deadly Attacks on Health Centers in Sudan's South Kordofan in Past Week, Says WHO

Sudanese families prepare to ride on trucks while on their way to Egypt through the Qustul border, after the crisis in Sudan's capital Khartoum, in the Sudanese city of Wadi Halfa, Sudan May 1, 2023. (Reuters)
Sudanese families prepare to ride on trucks while on their way to Egypt through the Qustul border, after the crisis in Sudan's capital Khartoum, in the Sudanese city of Wadi Halfa, Sudan May 1, 2023. (Reuters)

Sudan's South Kordofan region has seen attacks on three health facilities in the past week alone, leaving more than 30 dead, the World Health Organization said Sunday, AFP reported.

"Sudan's health system is under attack again," WHO chief Tedros Adhanom Ghebreyesus said on X, pointing out that, since February 3, "three health facilities were attacked in South Kordofan, in a region already suffering acute malnutrition".


Killing of Seif al-Islam al-Gadhafi Raises Succession Questions in September Current

Seif al-Islam al-Gadhafi (file photo, Reuters)
Seif al-Islam al-Gadhafi (file photo, Reuters)
TT

Killing of Seif al-Islam al-Gadhafi Raises Succession Questions in September Current

Seif al-Islam al-Gadhafi (file photo, Reuters)
Seif al-Islam al-Gadhafi (file photo, Reuters)

Since the killing of Seif al-Islam al-Gadhafi, son of Libya’s late leader Moammar Gadhafi, in the western Libyan city of Zintan last Tuesday, urgent questions have surfaced over who might succeed him in leading the political current he represented.

The questions reflect Seif al-Islam’s symbolic status among supporters of the former regime, known as the September Current, a reference to backers of the September 1 Revolution led by Moammar Gadhafi in 1969.

Search for new leadership

Othman Barka, a leading figure in the National Current that backed Seif al-Islam al-Gadhafi, said supporters of the former regime had yet to agree on a new leader but retained the organizational and political capacity to overcome the current phase and later move toward an alternative leadership framework.

Barka told Asharq Al-Awsat that ties to Gadhafi and his sons had been both emotional and political, but said that what he described as national work would continue. He said organized efforts would be made to reach a new leadership after the repercussions of the killing were overcome.

It remains unclear how Ahmed Gaddaf al-Dam, the political official in the Libyan National Struggle Front and one of the most prominent figures of the former regime, views the future leadership of the September Current following Seif al-Islam’s killing.

Sources close to him told Asharq Al-Awsat it was too early to speak of a new leadership while mourning ceremonies continued in Bani Walid.

Gaddaf al-Dam limited his public response to reposting a statement by those describing themselves as supporters of the Jamahiriya system on his Facebook page. He stressed unity, saying the killing would not lead to the fragmentation of the current and that September supporters remained a single, solid bloc.

In Bani Walid in western Libya, where Seif al-Islam was buried on Friday, shock was evident in the tone of Libyan activist Hamid Gadhafi, a member of the late leader’s tribe. He told Asharq Al-Awsat that clarity over the future leadership would emerge after about 10 days.

Possible successors

Libyan social media pages circulated the names of potential successors, including Seif al-Islam’s sister, Aisha, and his brother, Saadi. Libyan political analyst Ibrahim Belqasem rejected that view, telling Asharq Al-Awsat that the only remaining driver for supporters of the former regime would be the emergence of an unexpected, nonpolitical figure, describing it as an attempt to rescue the current.

After the fall of Gadhafi’s rule in 2011, following 42 years in power since the 1969 revolution, his supporters reemerged under the banner of the September Current. They are popularly known as the Greens, a reference to the Green Book.

Fragmented components and the absence of unified leadership mark the September Current. Seif al-Islam was widely seen as a central symbol among supporters, as well as among political figures and groups calling for the reintegration of former regime supporters into political life and for the recognition of their rights.

Nasser Saeed, spokesman for the Libyan Popular National Movement, one of the political arms of former regime supporters, said he expected a national political leadership to take shape in the coming phase to continue what he described as national work until the country stabilizes. Libyans can determine their future.

He said the emergence of a new leader or symbol was a matter for a later stage, stressing that the project was ideological rather than tied to individuals.

Saeed told Asharq Al-Awsat that Seif al-Islam al-Gadhafi’s legacy lay in a unifying national project that rejected foreign intervention and sought to restore sovereignty and stability. He said Seif al-Islam had represented hope for overcoming the crisis and that his project extended the path of the September Revolution as a liberation choice that still retained supporters.

Structural challenges

Organizationally, the former regime cannot be confined to a single political framework. Its structures and leadership are diverse, including independent organizations and figures.

Among the most prominent are the Libyan Popular National Movement, founded in 2012, and the Popular Front for the Liberation of Libya, formed in 2016 by politicians and tribal leaders in support of Seif al-Islam al-Gadhafi.

Their representatives increased their presence after 2020, whether in the Geneva forum that led to the formation of the Government of National Unity or in UN-sponsored structured dialogue tracks, before suspending participation following Seif al-Islam’s killing.

Voices within the September Current believe the killing marked a decisive turning point that cast heavy shadows over the ability of former regime supporters to forge unified leadership, citing structural difficulties rooted in historical disagreements between what is known as the old guard and supporters of change led by Seif al-Islam.

Khaled al-Hijazi, a prominent political activist in the September Current, agreed with that assessment, saying Seif al-Islam’s symbolic role had helped balance internal disputes due to his reformist project before the February 17 uprising.

Al-Hijazi told Asharq Al-Awsat that the loss of that symbolism could revive old divisions and complicate efforts to recreate an inclusive leadership, amid internal and external factors that make unification highly complex in the foreseeable future.

Barka said differences were natural, stressing that the current was not a closed party and believed in democracy and pluralism. He said generational competition did not amount to conflict and noted there had been no violent clashes between supporters of different paths within the September Current.

He concluded by saying that the diversity of approaches served a single goal: the freedom and prosperity of Libyan citizens and the building of a sovereign state capable of overcoming the crisis that has persisted since 2011.