Home - el Khazen Family Prince of Maronites : Lebanese Families Keserwan Lebanon

Lebanese Banks Hold Line Against Default, Urge Bond Swap Instead

Details

Customers use an automated teller machine (ATM) outside an Audi Bank SAL bank branch in Beirut, Lebanon.

By Dana Khraiche and Lin Noueihed -- Bloomberg -- Lebanon’s banking lobby made a last-ditch appeal to the government to avoid a debt default and instead offer a swap into new notes for all bondholders. In the clutches of its worst financial crisis in decades, Lebanon is running out of time to decide how to handle a debt burden that economists say is no longer sustainable. It faces a choice of repaying more than $1.2 billion of Eurobonds due March 9 or restructuring liabilities to preserve dwindling foreign-exchange reserves. The best solution is to repay the debt through a swap for new securities and embark on immediate reforms to clean up public finances and restore the confidence of diaspora investors, according to Salim Sfeir, head of the Association of Banks in Lebanon. Foreign bondholders could be willing to agree to such an exchange if the country can convince them of acting in good faith to carry out reforms and implement a credible plan, he said. “We still believe that a wise approach to the economic crisis and the financial obligations toward the international community is feasible if there is goodwill by the government to adopt the necessary reform plans and restructuring policies for our economy,” said Sfeir, who is also chairman of Bank of Beirut.

Lebanon’s central bank had proposed a debt swap with local lenders in January as a way to avert default. Prospects for a swap faded, however, after local banks sold some of their Eurobond holdings at a discount to overseas funds such as Ashmore Group, a British fund that’s bet the government would pay out. The sales mean that foreign funds now hold a larger proportion of the Eurobond series maturing in 2020, giving them more leverage in any restructuring discussion. The Justice Ministry asked the prosecutor last month to investigate the transactions on the ground that local banks might have obstructed the government’s efforts to restructure debt. Sfeir defended banks by saying they sold their holdings to get hold of fresh dollars needed to pay outstanding liabilities of almost $9 billion and meet demand for fuel, wheat and medicine suppliers. “This is also why many of the banks were forced in recent months to sell their own bonds at a discount, thus taking great losses just to be able not to default,” he said.

Lebanon asks schools and universities to close for coronavirus

Details

By Matilda Coleman -- Beirut, Lebanon – Lebanon has asked all schools, universities and nurseries to close until March 8 as a precaution against the new coronavirus. So far, the country has recorded seven cases of the virus that was first detected in China at the end of last year, while dozens have been tested and are waiting for results or have been negative. Three of the patients, two Lebanese and an Iranian, had returned from Iran, the regional epicenter of the virus. The fourth case, of Syrian nationality, is suspected of coming into contact with someone who visited Iran, the Lebanese Ministry of Health said on Saturday in a statement. Three of the cases were in a stable condition, but an elderly patient suffered several diseases prior to his coronavirus infection and "his condition is unstable."

Later, on Saturday, the ministry said the number of cases had increased to seven, and that the three new patients had previously been in contact with infected people. All patients are currently in quarantine at the Rafik Hariri University Hospital in the capital, Beirut. Almost all educational institutions are expected to respect the request of the Minister of Education, Tarek Majzoub, on Friday night about the closure. However, the prestigious American University of Beirut, which has about 10,000 students, announced that it would remain open, "based on consultations with several experts in the field of infectious diseases."

Travel restrictions

Beirut’s parking meters: Where does the money go?

Details

Image result for beirut parking meter

Beirut: Every year the Lebanese capital´s parking meters generate the equivalent of six million dollars, but the municipality on whose soil most operate says it has yet to see a penny. The case is just one to have sparked public anger in a country rocked since October 17 by unprecedented anti-government protests. A source with the borough claims that, under a 2004 deal with the Traffic Authority, a share of the coins slipped into Beirut´s parking meters are supposed to land in the municipality´s coffers. But "until now, the municipality has not received anything," the source told AFP. During the mass protests of recent months, the municipality filed a complaint with the Council of State and obtained permission to choose an auditor to investigate the case. "We want to know how much they earned each day, we want to know everything on each and every pound," the source said. The municipality has also requested to be put back in charge of the parking metres on its turf.

Lebanese-American consortium Duncan-Nead, operates some 900 meters in Greater Beirut under a contract with the Traffic Authority. An employee at the company, who requested to remain anonymous, said they generate an annual income of 10 billion Lebanese pounds, or a little more than six million dollars. They were set up under a wider transport plan for Greater Beirut, with funds from donors including the World Bank. Some have asked why the municipality is only now complaining, more than a decade into the project under which the Traffic Authority was supposed to pay a concession fee to the municipalities. But the source at the borough blamed previous municipality officials who did not look into the matter, as well as grinding bureaucracy. Until 2012, he said, the municipality didn´t even have a copy of the contract with the Traffic Authority and seemed to know little about the deal. The Traffic Authority in November said money it collected from parking meters was used to maintain the meters themselves as well as traffic lights, surveillance cameras and electric road signs.

Cash-Strapped Lebanon Isn’t Ready for the Coronavirus

Details

A view of a slum area in Lebanon's northern port city of Tripoli.

by foreignpolicy.com -- BETSY JOLES -- Fear of the COVID-19 epidemic has spread across the Middle East after Iran recorded the highest number of deaths from the virus outside of China this week. The high mortality rate indicates the outbreak might be larger than Iran’s official recorded figures. Saudi Arabia has responded by banning foreign pilgrims from traveling to the holy sites of Mecca and Medina. Lebanon has confirmed three cases so far, people who had returned from recent trips to Iran. The threat could not come at a worse time: The country is teetering on the edge of bankruptcy and reeling from several months of anti-government protests. Lebanon is facing its worst economic crisis since its 1975-1990 civil war, with a looming $1.2 billion Eurobond payment on March 9. If the government defaults, it would deal another major blow. These financial shortcomings limit the country’s ability to respond to the coronavirus, from hiring enough trained health workers to conduct fever screenings at the airport to equipping hospitals with specialized gear such as respirators for quarantine areas. Coming up with the human and capital resources needed to handle severe virus cases would put an already ailing health care system in dire straits.

The state of the economy has already overwhelmed Lebanon’s public health care system. Medical suppliers are unable to import the products they need due to a shortage of U.S. dollars caused in part by a slowdown of foreign currency injections into the banking sector. Health care is another item on the list of demonstrators’ public grievances, with medical professionals decrying corruption and inattention from the government when it comes to providing hospitals with what they need. Doctors are also protesting the government’s failure to reimburse hospitals for care provided to patients who should be covered by social security and military health funds, according to Human Rights Watch. The procedures put in place so far to prevent the spread of the virus inside Lebanon show the health care system’s strain.

Lebanese Pop Star Elissa: Coronavirus Spread from Iran Because Officials Feared Hezbollah

Details

By listenarabic.com - www.listenarabic.com/arabic-music/wp-content/uploads/2012/08/DSC_0061.jpg, CC BY 3.0, https://commons.wikimedia.org/w/index.php?curid=62309600

by breitbart.com -- Outspoken Lebanese pop star Elissa, one of the most popular female singers in the Arab world, on Monday accused her government of refusing to cancel flights from Iran to keep the Wuhan coronavirus at bay because officials feared to antagonize Hezbollah. “Only because we don’t want to upset Hezbollah, we don’t stop Iran flights. On top of all that, they tell us not to panic!” she exclaimed. “When will we be rid of the sheep’s mentality and start talking logic and science?? What is this place we live in??” she asked.

The singer was responding to Lebanon’s first confirmed case of the coronavirus, a 45-year-old woman who apparently brought the virus with her from Iran and is currently hospitalized in Beirut. A second case was confirmed and quarantined in Beirut after Elissa made her remarks. The second patient reportedly arrived on the same flight from Iran as the first one. In the course of reporting Elissa’s comments, al-Arabiya News noted that other Lebanese are making similar points about the recklessness of allowing travel from Iran even as coronavirus cases add up quickly in that country. Iran has reported 139 infections and 19 deaths to date, the highest numbers outside China. “Lebanon continues to allow Iran to export its virus, sectarianism, arms, and funds to Hezbollah,” Lebanese journalist Jerry Maher charged.

Distrust in Lebanese banks spurs bitcoin boom

Details

Lebanon's banks, which have imposed increasingly restrictive informal restrictions on cash withdrawals and transfers abroad, have incurred the ire of anti-government protesters amid the country's worst economic crisis in decades [File: Mohamed Azakir/Reuters]

by aljazeera.com -- Timour Azhari -- Beirut, Lebanon - When Maher, an engineer in his mid-30s, returned to Lebanon flush with cash from working in the Gulf, he deposited his hard-earned savings in a bank - believing they would be safe. But as Lebanon has spiralled into its worst economic crisis in decades, banks have imposed informal capital controls that force people to withdraw their savings in Lebanese pounds at the official exchange rate that effectively values their savings at 40 percent less than what its worth on the parallel market. "Nothing can prepare you for the shock of this," Maher told Al Jazeera. But Maher, who asked his surname be withheld to protect his privacy, is not standing by helplessly. He is trying to move what is left of his savings out of Lebanon via a financial instrument many in the country have not embraced - until recently.

Bitcoin.

"Suddenly everything turns upside down and all the options are open," said Maher. With confidence in Lebanese banks at an all-time low over increasing restrictions on foreign currency movements, more Lebanese are turning to digital currencies like bitcoin as a way to shift their money in and out of the country. "Right now, Lebanese are interested in escaping tight restrictions on cash withdrawals and transfers. They basically want financial freedom," 29-year old Mahmoud Dgheim, who has traded bitcoin since 2015, told Al Jazeera. "If you want to go around the banking system, bitcoin is a solution." Bitcoin - the first and most well-known cryptocurrency - is neither issued nor controlled by any government or financial entity. Rather than go through a bank or another middleman, transactions made in bitcoin are peer-to-peer, anonymous and verified by a centralised global network of computers.

Economists Call for Restructuring Lebanon's Public Debt

Details

Lebanese Prime Minister Hassan Diab and officials meet with a team of IMF experts at the government palace in Beirut, Feb. 20, 2020.

by voanews.com --AMMAN, JORDAN - Lebanon is engulfed in a crippling financial crisis as the government seeks support from an International Monetary Fund technical delegation visiting the country. The IMF is trying to help draw up a comprehensive economic, monetary and financial rescue plan for the tiny Mediterranean country. So far, Lebanon has not asked for financial assistance from the IMF, but meetings are still continuing. Protests since October have seen the ruling elite blamed for decades of financial mismanagement. Lebanese economist Kamal Hamdan directs the Consultation & Research Institute in Beirut. He said the government has not yet provided a detailed action plan or roadmap out of Lebanon’s financial turmoil, but he expects one to be announced in the next 10 days. He sees the IMF visit as perhaps helping or accelerating the emergence of such a plan.

He said Lebanon’s gross domestic product for 2019 was negative and the same can be expected this year. The U.S. dollar has also increased by 60 percent against the Lebanese lira currency, while the consumer price index hovers around 10 percent. He warns that with these indicators, the short-term outlook is not good. "We are in an economic catastrophe. Higher inflation, higher deprivation of the purchasing power of many Lebanese — maybe two-thirds of Lebanese have their income in Lebanese pounds. The whole pension system is based on Lebanese pounds. I don’t know how to say … we have to expect shocks with respect to social issues in the coming weeks and months," said Hamdan.

Public debt