Saturday, January 18, 2020

In Lebanon, the banking crisis stirs the anger of the population

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A disgruntled customer blocked his Lebanon and Gulf Bank (LGB) with his truck in Sidon, southern Lebanon, on January 4. MAHMOUD ZAYYAT / AFP

"The banks humiliate us, they put us in the position of beggars when we only ask for our money", fumes Fouad, a client, in Beirut. At the cost of a long wait, he could only get 200 dollars (180 euros), the maximum weekly withdrawal authorized by his bank. In another agency, one hour after opening, the receptionist, exhausted, warns new arrivals: "There are no more dollars. We haven't received many today. We can't serve everyone. " That day, the earliest people will leave with 100 dollars.

The lines in front of the banks in the early morning are now part of daily life in Lebanon. The banking organizations impose, each as they please, unofficial capital controls on the Lebanese pound and the dollar, the two currencies used. ATM withdrawals are capped. Only books are still available in vending machines. Transfers abroad have become impossible, with rare exceptions. Measures guided by the lack of liquidity and the desire to avoid a bank rush.

Article reserved for our subscribers Read also In Lebanon, collapsing economy creates despair

Beyond the need for cash for everyday expenses, some depositors fear losing their savings. Others expect to obtain foreign currency to convert it into exchange offices, where the dollar now exceeds 2,300 pounds (against 1,507.5, according to the official rate), while prices rise in shops.

Faced with draconian banking restrictions, especially in dollars, the Lebanese have been rather understanding for long weeks, even if the cries and tears were not lacking. "It's very heavy. There are workers every day. We get insulted. It sometimes takes a personal turn ”, says a counselor.

Unfair treatment

Now, however, violent incidents, such as the burning of vending machines, are increasing. Since the end of December, supporters of the protest movement have also been carrying out sit-ins in banks, in order to force them to pay their money to depositors. In the north of the country, one of these actions turned into a riot on Friday, January 3.

Above all, it is the brutal end of a denial, fueled by political leaders, that the Lebanese live

The treatment is deemed to be all the more unfair since customers feel they are paying the price, while the banks have made huge profits, notably by financing Lebanon's debt (more than 150% of gross domestic product). There was also the scandal of a suspected multi-billion dollar transfer from Lebanon to Switzerland in December by political leaders.

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