The power struggle between Prime Minister-designate Saad Hariri, on the one hand, and President Michel Aoun and his son-in-law Gebran Bassil, on the other, has worsened despite warnings from world leaders and economic experts about the dire economic conditions in which little Lebanon finds itself. versus. The World Bank said Tuesday that the Lebanese crisis is one of the worst the world has seen in 150 years.
In a reflection of the rising tower, dozens of Lebanese lined up in front of ATMs late Wednesday, after a higher court suspended a Central Bank decree allowing them to withdraw from dollar deposits at a rate twice. and a half better than the fixed exchange rate.
The Lebanese pound, pegged to the dollar for 30 years at 1,507, has been in free fall since late 2019. It is now trading at nearly 13,000 to the dollar on the black market.
Lebanon is governed by a sectarian power-sharing agreement, but as the crisis deepens, members of the ruling elite argue over how to form a government that will have to make tough decisions.
Hariri, who was tasked with forming a cabinet seven months ago by Aoun, blames the president for the months-long delay, accusing him of insisting on veto power in the next government.
Aoun, an ally of the powerful militant group Hezbollah, has said that Hariri did not shoulder his responsibilities in forming a government that the two can agree on. There is no legal way for the president to fire the designated prime minister, who is elected to office by a majority of lawmakers.
The breakdown has paralyzed the country with liquidity problems, delaying urgently needed reforms. The economic crisis, which erupted in 2019, has been compounded by the impact of the coronavirus pandemic in Lebanon and a massive explosion in the port of Beirut last year that killed more than 200 people and disfigured much of the capital.
The crisis has driven more than half of the population into poverty, caused the local currency to lose more than 85% of its value, and led banks to block deposits through informal capital controls, eroding confidence in a banking sector that was once thriving.
The country’s highest administrative court on Tuesday ordered the temporary suspension of a central bank circular that gave depositors the opportunity to withdraw at a rate better than the fixed rate.
The Central Bank announced late Wednesday that it accepted the decision, prompting queues outside ATMs. One man said he went from one ATM to another to withdraw as much as he could. Another complained that people’s savings are at the mercy of corrupt politicians.
“This is not resilience. We get used to being so humiliated and controlled by politicians,” said Mustafa Taoush, a 23-year-old who failed to withdraw more than a weekly limit imposed on withdrawals.
A statement from Aoun’s office on Wednesday accused Hariri of attempting to usurp presidential powers and of presenting “delusional propositions and insolent expressions.”
“The continued evasion of responsibilities by the designated prime minister … constitutes a persistent violation of the constitution and the national agreement,” he added.
Hariri and his political group, the Futuro party, responded by saying that the presidency is “hostage to the personal ambitions” of Bassil, Aoun’s son-in-law, alluding to his alleged presidential aspirations.
High-level mediation efforts by France and powerful local actors, including the speaker of parliament and the head of the Maronite Church, have faded without a breakthrough in the face of intransigence from rival parties in Lebanon.
Amid the Aoun-Hariri spikes, Acting Prime Minister Hassan Diab warned that a collapse of Lebanon could have consequences beyond its borders, hinting at a possible mass exodus of refugees.
Diab, whose cabinet resigned days after the port explosion, called on politicians to make concessions so that a new cabinet could be formed, one that could resume talks with the International Monetary Fund on how to get out of the crisis.
“The collapse, if it happens, God forbid, will have very serious consequences not only for the Lebanese or those who live here, but also for the friendly countries of the land and the sea,” Diab said. “No one will be able to control what waves the sea brings.”