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Banks bag UN aid, subsidies warning, strikers call hypocrite on political parties: Everything you need to know this Friday

Here’s what happened yesterday and what to expect today, Friday, June 18, and this weekend

Banks bag UN aid, subsidies warning, strikers call hypocrite on political parties: Everything you need to know this Friday

Outgoing Energy Minister Raymond Ghajar on Thursday warned of an impending end to fuel subsidies. (Credit: NNA)

Lebanese banks swallowed at least $250 million of United Nations humanitarian aid from 2019 to 2021, a Thomson Reuters Foundation investigation has found. Banks siphoned away funds intended to support refugees and vulnerable Lebanese by exchanging aid dollars for lira at rates below 40 percent of the greenback’s market value. Officially still pegged to the dollar at LL1,507.5, the lira has lost more than 90 percent of its value on the parallel market since the onset of a catastrophic financial crisis in the country in mid-2019. The investigation concluded that a third to half of the UN monetary aid in Lebanon has ended up benefiting the banking system since 2019, even as banks have locked depositors from their savings and reportedly hemorrhaged more than 10 percent of their workforce amid a foreign currency liquidity crunch.

The Lebanese should gear up for the eventual lifting of fuel subsidies and the potential need to find transportation that does not rely on gasoline, the outgoing energy minister warned. Speaking after a meeting of Parliament’s Public Works, Transportation, Energy and Water Committee, Raymond Ghajar also suggested that the central bank shift to fully subsidize fuel at a rate of LL3,900 to the dollar rather than subsidizing 90 percent of fuel imports at the official rate. This would increase fuel prices and in turn cut down on fuel smuggling from Lebanon to Syria, while keeping costs significantly below what residents would have to pay if subsidies ended and gas was priced at the parallel market rate, Ghajar said. Ghajar’s remarks come as queues at petrol pumps continue to snarl traffic on roads across the country, despite importers’ and the central bank’s assurances that they would be alleviated.

Mainstream political parties’ participation in a general strike stoked ire on social media yesterday. Both public and private businesses throughout Lebanon, including commercial banks, shuttered to protest deteriorating living conditions and call for the government’s formation. Early in the morning, protesters blocked key roads across the country, including the Azmi intersection in Tripoli, Corniche al-Mazraa in Beirut and the coastal highway in Khaldeh. Dozens of demonstrators also gathered in front of the Labor Union headquarters in Beirut to demand the long-delayed cabinet formation. Bechara al-Asmar, the head of the General Confederation of Lebanese Workers, which organized the strike, called for the formation of a “rescue cabinet,” but also thanked the political parties that supported the strike. On social media, however, residents and activists denounced the participation political parties, which they hold responsible for the conditions that were being protested.

World powers agreed on the need to support the Lebanese Army during an online conference yesterday but gave scant details as to the specific assistance they would provide. During the meeting, organized by France, army commander Gen. Joseph Aoun reiterated a warning he made during a visit to Paris last month that worsening living conditions in Lebanon could lead to the fall of the army and other state institutions. The participants, which included the United States, China and Russia, as well as European states and some Gulf countries, were asked to assist with essential needs such as food, medical supplies, spare equipment parts and fuel; they were not asked to help pay salaries. Notably, Saudi Arabia was absent from the meeting. Two diplomats told Reuters that not much tangible assistance was offered during the conference but that most participants indicated they would provide bilateral support in the future.

Parliamentary talks over the future of subsidies are set to resume today at 10 a.m. A newly formed subcommittee chaired by MP Yassine Jaber will compare and evaluate two proposals to replace the current subsidy program: caretaker Premier Diab’s proposal to disburse $137 monthly to 750,000 of Lebanon’s poorest families and Free Patriotic Movement leader MP Gebran Bassil’s option of transferring $100 to every Lebanese family with bank deposits below a yet-to-be-specified threshold.

A high-ranking European Union representative will meet with Lebanon’s top officials this weekend. Josep Borrell, the EU’s high representative for foreign affairs and security policy and the vice president of the European Commission, is set to meet with President Michel Aoun, Prime Minister-designate Saad Hariri, Parliament Speaker Nabih Berri and Diab, as well as high-level security chiefs and civil society representatives. Borrell will hold a press conference on Saturday at 10:45 a.m.

Lebanese banks swallowed at least $250 million of United Nations humanitarian aid from 2019 to 2021, a Thomson Reuters Foundation investigation has found. Banks siphoned away funds intended to support refugees and vulnerable Lebanese by exchanging aid dollars for lira at rates below 40 percent of the greenback’s market value. Officially still pegged to the dollar at LL1,507.5, the lira has lost...