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Lebanon’s banks reopen after two-week closure amid protests

Omar Ibrahim, Reuters | People queue outside a branch of Fransabank in Tripioli, Lebanon November 1, 2019.

Lebanese banks opened to customers on Friday for the first time in two weeks following an unprecedented wave of protests that led the prime minister to resign, with small numbers of customers queuing as the doors opened. 

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An hour after doors opened, queues of several dozen people had formed at least eight banks in Beirut, Reuters witnesses said. At other banks only a handful of people were waiting. By opening time, queues of up to 20 formed outside at least three banks in other parts of the city, Reuters witnesses said. Smaller numbers were seen at other branches.

Several customers waiting to be served said they had expected the situation to be worse. "There is not a lot of panic. I thought it was going to be more," said a customer who was holding a ticket showing he was 17th in line outside a branch of Byblos Bank in Zouk Mosbeh, north of Beirut, where about 20 people were waiting.

Analysts and bankers have cited widespread concern about a rush by depositors to withdraw their savings or transfer them abroad when the banks reopen. The central bank has pledged not to impose capital controls when banks re-open, measures that could deter the currency inflows and investment Lebanon badly needs to weather its most severe economic pressures since the 1975-90 civil war.

But seven banking sources said on Thursday that while Governor Riad Salameh was sticking to that policy, commercial banks would only be allowing transfers abroad in cases such as payments to children, for healthcare or loan payments. Salameh was leaving it to commercial banks to decide on individual policies that could make it harder move funds overseas and convert them into foreign currency and less attractive to withdraw savings.

After protests subsided on Wednesday, the Association of Banks in Lebanon said the banks would reopen as previously announced on Friday to provide for "pressing and fundamental needs" including salary payments.

In the capital Beirut, a handful of activists briefly stormed the headquarters of the Association of Banks on Friday, before they were forced out by riot police.

A day after Aoun's speech

On Friday, the leader of Hezbollah called for the quick formation of a new Lebanese government that he said must hear the demands of protesters and work to restore confidence.

In a televised speech, Sayyed Hassan Nasrallah said Prime Minister Saad al-Hariri’s resignation, prompted by massive protests against the ruling elite, had frozen government reform plans.

The reopening of the banks comes a day after the country’s president seemingly endorsed a demand by the protest movement, saying Lebanon’s next cabinet should include ministers picked on skills, rather than on political affiliation.

Michel Aoun's speech came as Lebanese protesters tried to block reopened roads and prevent their unprecedented non-sectarian push for radical reform from petering out. It followed the resignation of Prime Minister Saad Hariri's government on Tuesday which had been met with cheers from crowds seeking the removal of a political class seen as corrupt, incompetent and sectarian.

"Ministers should be selected based on their qualifications and experience, not their political loyalties," Aoun said in a televised speech on the third anniversary of his presidency, pledging also to combat corruption and enact serious reforms.

But his speech was met with disdain by demonstrators in central Beirut who, in response to his words, chanted the popular refrain of the 2011 Arab uprisings: "The people demand the fall of the regime."

Nihmat Badreddine, an activist, said the president's promises were "good in theory". "But there is no mechanism for implementation... and there is no deadline" she said, expressing fears of a stalled process. 

Sparked on October 17 by a proposed tax on free calls made through messaging apps such as WhatsApp, the protests have morphed into a cross-sectarian street mobilisation against an entire political class that has remained largely unchanged since the end of the country's 1975-1990 civil war.

Some schools, who were also closed, have also reopened this week. 

Acute political uncertainty

On Thursday, Aoun asked Hariri's government to stay on in a caretaker capacity until a new one can be formed, but Lebanon has entered a phase of acute political uncertainty, even by its own dysfunctional standards.

With a power-sharing system organised along communal and sectarian lines, the allocation of ministerial posts can typically take months, a delay Lebanon's donors say the debt-saddled country can ill afford.

Consultations for the formation of a new government have not yet started, such is the rift between Hariri and his coalition rivals, according to a political source involved in discussions. The source said that consultations are scheduled to begin on Monday.

"A technocratic government is a possibility," political analyst Amal Saad-Ghorayeb said. "It would have to ensure a short-term stabilisation of the economy, which has spiralled out of control these past weeks, while ensuring economic reforms pass quickly, otherwise mass protests will erupt once again," she added.

‘Out of the question’

The fall of the government under pressure from the street had led to an easing of the lockdown that has crippled the country of six million inhabitants. While some life returned to Beirut and other cities this week, die-hard protesters were reluctant to lose one of the few forms of leverage they have to press demands that go far beyond the cabinet's resignation.

"Giving up is out of the question," said Tarek Badoun, 38, one of a group of demonstrators blocking the main flyover in central Beirut.

The mass mobilisation, which has seen hundreds of thousands protest nationwide, has so far been largely bloodless, despite sporadic scuffles with counter-demonstrators from the established political parties.

(FRANCE 24 with REUTERS and AFP)

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