account holders storm the banks while the economy is collapsing

account holders storm the banks while the economy is collapsing
account holders storm the banks while the economy is collapsing
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The double attempt by some account holders to withdraw their sums of money deposited in the bank with arms explain better than any word and given the gravity of the situation in Lebanon. Once known as the Switzerland of the Middle East, with golden beaches and a Mediterranean climate, capable of attracting investors and tourists from all over the globe, since the end of 2019 Lebanon is increasingly sinking into the economic and social crisis, which is joined by one political stalemate that worsens the already precarious situation. Despite the lack of official poverty data – which the government does not systematically collect, partly due to the absence of a census since 1932 – estimates suggest that multidimensional poverty nearly doubled between 2019 and 2021, hitting 82. percent of the population last year. Figures released by the Lebanese Statistics Agency in late July indicate that inflation reached 210 percent last June on an annual basis. Real gross domestic product is estimated to have declined by 10.5 percent in 2021, after a decline of 21.4 percent in 2020.

This year, the World Bank expects the Lebanese economy to contract by another 6.5 percent, given the uncertain economic scenario. Meanwhile, the value of the Lebanese pound has plummeted by 90 percent on the black market and public debt exceeded $ 100 billion in 2021, or 212 percent of GDP. The latest Fitch Solutions report released last August predicts that the average inflation rate in 2022 will hit 178 percent, up from 155 percent in 2021. According to Fitch Solutions, Lebanon’s inflation rate in 2022 should be the second tallest in the world, behind Sudan. The figures, while alarming, are far from the peak of inflation recorded in 1987, towards the end of the civil war (1975-1990), when it reached 741 percent. Inflation will be fueled by the high global prices of raw materials and oil, by the continuous depreciation of the Lebanese pound on the parallel market and on Sayrafa, the electronic trading platform regulated by the Banque du Liban (Bdl).

The lawyer Rami Ollaik, founder of the collective “Mouttahidoun”, which supports Lebanese account holders in getting their savings blocked in banks due to the financial crisis, confirmed the coordinated action that involved two credit institutions: Blom Bank, Achrafieh district, a residential area of ​​the capital Beirut, and the BankMed branch in Aley, a city located about 10 kilometers east of Beirut. Interviewed by the Lebanese newspaper “L’Orient le Jour”, Ollaik confirmed his presence this morning at the Blom Bank, where a woman accompanied by some activists of the collective entered the branch of the bank armed with a gun. ordering the staff to hand over approximately $ 30,000, deposited in his account, to pay for the treatment of his sister with cancer.

Later, the police would have arrested the “robber”. “I went with them to the bank, I support this action and I helped them carry it out, with the necessary force, so that they could recover their deposit, their savings,” said Ollaik. “The sister of the woman who led the action has terrible cancer and the banks refuse to give money for this kind of case,” he said. The founder of the Mouttahidoun collective confirmed that this hostage-taking was organized in coordination with several depositor associations. Ollaik also pointed out that the collective he founded also supported another operation in the town of Aley against the BankMed branch in Aley, where a man broke into the building to ask for the money deposited on his own. I count. According to reports from the Lebanese news agency “Nna”, the security forces have arrested the man.

Those that occurred today are respectively the second and third hostage crises in a month in Lebanon, where the devastating financial situation has forced many banks to block the accounts of their account holders. On 11 August, an account holder took employees and clients of the Federal Bank of Hamra in Beirut hostage for several hours because he wanted to withdraw his deposits. After several hours of negotiations, the man, armed with a gun, accepted the bank’s proposal to receive 30,000 out of a total of $ 209,000 in savings. The negotiations took place in the presence of police and army officers and a few dozen people who responded to the appeal of the “Cri des déposés” association in solidarity with the kidnapper. The man had sprinkled the bank’s premises with gasoline and stolen a gun from a security officer, threatening to set it on fire immediately upon entering the institute.

The crisis of 2019 became full-blown in March 2020, when the government stated why it was unable to repay the $ 1.2 billion tranche of a Eurobond issued in 2010 and which was worth 30 billion. Following the default, the Lebanese government imposed control measures on capital movements and a ban on access to foreign currency deposits, as well as assuming access to financing from the International Monetary Fund (IMF). Indeed, in April 2022 – a month before the parliamentary elections – the Lebanese authorities and the IMF negotiating team reached an agreement on economic policies that could be backed by 46-month funding with access to 2,173.9 million. of special drawing rights (equivalent to approximately $ 3 billion) “. The release of international financing, including that of the World Bank, which last May approved the emergency loan of 150 million dollars for Lebanon to support food security, is conditional on the implementation of reforms. The latter, of course, need an executive in full force and agree on a number of points. However, despite the negative economic data, the food and even the electricity crisis, the Lebanese political class does not seem to have enough motivation to break out of the stalemate and implement the required reforms.

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After the parliamentary elections of 15 May, there is a tug-of-war between the designated premier, Najib Miqati, and the head of state, Michel Aoun, whose mandate expires on October 31, for the approval of the new ministerial team, leaving the land of cedars in an impasse. The Lebanese economic and political crisis has strong repercussions also at the social level. In a report released in January 2022, UNICEF revealed that the Lebanese crisis is forcing more and more young people to drop out of apprenticeships and engage in underpaid, irregular and informal jobs just to survive and help feed their families. Furthermore, the current situation is pushing the Palestinian and Syrian population and refugees to leave the country irregularly. A United Nations report from last May reveals that Palestinian and Syrian refugees face dire living conditions in Lebanon, with 88 per cent of them living in minimal survival conditions and about half of Syrian families having food problems.

In 2020, reports the portal “Atalayar”, more than 1,500 Lebanese – Palestinians or Syrians – tried to leave the country on makeshift boats, but about 75 percent of these migrants were intercepted by the authorities or sent back to land. And since then, the situation has only gotten worse, with a worrying increase in the number of illegal boats trying to reach the Cypriot coast. In recent months, the Directorate for General Security of Lebanon has announced several arrests of people who have tried to leave the country irregularly. The most striking case of the phenomenon occurred last April, when a boat crashed off the coast of Tripoli, in the north of the country, carrying 84 migrants – including Lebanese, Syrians and Palestinians. To date, 33 people are still missing, in yet another humanitarian tragedy in the Mediterranean.

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The article is in Italian

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