Nasrallah weighs in, election workers go unpaid, premier-designate selection to begin: Everything you need to know to start your Friday

Hassan Nasrallah said last night that although his party won’t take part in the negotiations over the disputed maritime boundaries with Israel, Hezbollah “does not want a war, yet is not afraid of one.” In a televised speech that comes days after Israel encroaching on disputed waters to commence its gas exploration efforts, the Hezbollah leader insisted that his party “does not interfere, neither in [negotiating] the [dividing] lines nor in the [maritime border] demarcation,” stressing that this is “the responsibility of the [Lebanese] state.” He added that “what Israel will lose in any war they threaten [us] with is much greater than what Lebanon would lose,” warning Energean, the company that operates the floating production facility Israel moved into the disputed Karish gas field, and its management that they “must bear full responsibility from now on for what may befall this ship, materially and humanly … and that they should know that they are accomplices in this attack and that they must immediately withdraw the ship.” Naim Qassem, Hezbollah deputy secretary-general, told Reuters on Monday that Hezbollah is ready to take action “including force” against Israeli gas operations in disputed waters once the Lebanese government adopts a clearer policy.

Lebanon’s banks should “go first” in absorbing the losses incurred from the country’s financial collapse through their capital, caretaker Deputy Prime Minister Saade Chami told Reuters yesterday. Chami additionally denied that the state would rely on a sovereign fund or gold reserves to reimburse depositors. Chami is the architect behind a recovery roadmap passed by Lebanon’s cabinet just before it went into caretaker mode following parliamentary elections last month, which includes several measures required to unlock essential funding from the International Monetary Fund. The Association of the Banks of Lebanon has rejected the plan, saying it would force depositors and banks to bear the brunt of $72 billion in estimated losses. Chami, however, insisted to Reuters that “banks should go first in terms of their capital before we can touch any depositors.” “We are not going to do a Robin Hood principle in reverse, taking from the poorer to give to the richer — this is not acceptable,” he said, calling on banks to “make sacrifices” to protect depositors. Lebanon’s economic downward spiral commenced in 2019 but went into overdrive in the spring of 2020 after the state defaulted on a $1.2 billion Eurobond. Chami further predicted that the country would run out of reserves “[in] probably a few months.”

The International Monetary Fund is setting up a Resident Representative Office in Lebanon, a little over a decade after it last had a resident representative in the country. Ernesto Ramirez-Rigo, the head of the IMF delegation to Lebanon, is traveling to Beirut before the end of the month to appoint a new resident representative, or point person for an assistance program. Frederico Lima, an economist who joined the IMF in September 2016, is set to occupy the post. The reopening of the resident representative office comes at a crucial moment during discussions between the IMF and Lebanon. A staff-level agreement was signed between Prime Minister Najib Mikati’s government and the IMF in early April which promised a financial assistance package of $3 billion spread out over 46 months provided certain reforms are implemented. The staff-level agreement remains subject to final approval by the IMF’s executive board.

Public administration employees have announced an open-ended strike, starting Monday, June 13, to demand an increase in salaries. In a press release, civil servants from the League of Public Administration Employees decried the “humiliation” to which they are subjected while “state funds are wasted before their eyes.” They further demanded the caretaker government take other measures to help them deal with deteriorating living conditions, calling for increased salaries and other compensations “in line with inflation,” an increase in their retirement pensions and an immediate increase in their medical, social aid and transport benefits in addition to shorter working hours as current working hours are “unjustified under current conditions,” the statement said.

Meanwhile, almost one month after legislative elections, polling and administrative workers still have not been paid, despite having been assured compensation within a week of the May 15 polls. According to a statement by the Committee of Contract Teachers in the Elementary Public Education published on Thursday, “Public sector employees, including teachers, were promised a sum of LL3.6 million for their participation [in the electoral process], to be paid within a maximum of one week.” Meanwhile, an ISF spokesperson told L’Orient Today that members who were guarding polling stations had been paid 40 percent of their election stipends. The Interior Ministry confirmed to L’Orient Today that payments made to the ISF and soldiers were agreed upon by the ministry in advance but “no one else was compensated for their work [on election day], from administrative staff to the work team of the [interior] minister.” The Finance Ministry could not immediately confirm why the workers have not been paid yet. The Interior Ministry, which oversees and organizes the parliamentary elections, said that at least LL115 billion were spent to cover 40 percent of payments to the ISF and soldiers.

Parliamentary consultations to name a new prime minister-designate will be held next week at the Baabda Palace. During the sessions, names of potential prime minister-designates, will be laid on the table. By convention, and not by legislation, the post is always reserved for a Sunni Muslim. The new prime minister-designate will be tasked with forming a new cabinet. Earlier this month, caretaker Premier Najib Mikati had expressed his reluctance to fulfill the role again saying that he finds the task “difficult … because most of the political discourse revolves around who has a stronger backing than who.” He did, however, suggest names of potential candidates, such as legislators Ashraf Rifi and Abdul Rahman Bizri, and a former economist at the IMF, Amer Bassat, adding that he would “support any other candidate proffered.” While the presidency had said earlier in the day that the consultations will take place “in the coming days,” a source at the Presidential Palace confirmed to L’Orient Today that they will start next week instead, without specifying on which day. Forming a new government in Lebanon has traditionally proven to be a sluggish task that could take months, despite the political and economic urgencies and the desperate need for reforms. The current government led by Mikati came to light in September 2021 after 13 months of political stalemate.

In case you missed it, here’s our must-read story from yesterday: “Waddah Sadek: The black and white sheep of the opposition.”