Lebanon: Parliament speaker urges ‘financial state of emergency’

Lebanon’s Parliament Speaker Nabih Berri urged the country’s government, central bank and commercial banks on Wednesday to declare a “financial state of emergency” and review all steps to protect the collapsing currency.

He also said Lebanon would not get a penny from the International Monetary Fund (IMF) or any donor state unless it carries out reforms, at the forefront of them accelerating an overhaul of its loss-making electricity sector.

The Lebanese pound has lost about 75 percent of its value since October when long-brewing economic troubles mushroomed into a financial crisis regarded as the biggest threat to Lebanon since its 1975-1990 civil war.

The pound, officially pegged at 1,507.5 to the US dollar since 1997, traded at 6,300/6,500 on the parallel market on Wednesday, a market participant said, weaker than levels of 6,000/6,200 cited by market participants on Tuesday and well in excess of the unified rate set by the central bank.

Exchange dealers who operate above the unified rate could face legal fallout.

With dollars scarce, the financial meltdown has frozen savers out of their deposits and forced up prices in the import-dependent economy.

“It is unacceptable that Lebanese be made hostages of black markets in currency, food, medicine and fuel,” Berri said during an emergency meeting of the Amal Movement, the Shia Muslim party he leads.

Donor states that have provided Lebanon with aid in the past have said it will not receive any until it undertakes reforms to fix the state corruption and waste that are at the root of the crisis. Lebanon began talks with the IMF in May.

“Any Lebanese official will be mistaken if he believes the IMF or any state or donor party can give us one penny of aid if we do not implement reforms,” Berri said.

“Frankly, the world and international community believes Lebanon is a bottomless basket, and before this bottom is closed there will be no aid.”