Investors and donors will not trust economic plan that avoids political and penal liability

In a statement, the Bloc noted that the government attempted to bridge the gaps of its previous economic plan by softening its terminology and including some measures and budgets for the production sectors. The Bloc also noted that the plan did not include the “haircut” term, but that it was present under the expression of “contribution of government bond holders”, in other words, the public debt. The Bloc stated that “the plan speaks of converting the deposit certificates due from the central bank to commercial banks into shares in those banks for the benefit of depositors." These certificates of deposit are the result of depositor funds, and since the central bank is unable to pay them out, it has switched them into commercial bank stocks. Additionally the Bloc stated that the term “optional” pertaining to the “Bail In” is irrelevant in the absence of an alternative.

The Bloc reminded that the process of the “haircut” had already taken place before the government’s plan, when the dollar’s exchange rate in the banks was fixed at the value of 1,500 Lebanese pounds: this led to the depositor losing half the value of any withdrawal he made in dollars because the market price reached more than three thousand pounds as an approximate rate during the past six months. The deterioration of the exchange rate eliminated half of the purchasing power of depositors in Lebanese pounds, because what is important is the purchasing power of funds ant their nominal value.

On the other hand, the Bloc wondered about the “basket of financial measures to support the productive sectors” that did not reference the source of its numbers and without consulting the production sector on any governmental plans. The Bloc also noted that the plan speaks about recovering 10 billion dollars of looted funds over a five year period, and asked where this number has come from? It is either random and popularist or intentional, since the amount of funds and the perpetrators of their theft are known, and all that is needed to recover them is an immediate judicial decision.

The Bloc added that "it must be noted that all expectations of this plan are based on an exchange rate of the dollar at 3,500 LBP, however as soon as the plan was announced, the Minister of Industry Imad Hoballah came out by saying that the exchange rate of the Lebanese Pound is fixed at 1,500 to the Dollar. On the other hand, Prime Minister Hassan Diab said that the central bank determines the exchange rate”. The Bloc wondered how a plan is set on the basis of an exchange rate of 3,500 LBP to the Dollar while this rate is rejected by one party, and said to be determined by government by the Prime minister.

The Bloc sees that this plan was created by three governmental parties, however we find two prominent representatives from the Free Patriotic movement, Ibrahim Kanaan and Alain Aoun, as well as Amal movement representatives Kassem Hachem and Hoballah criticizing and appealing the plan. We are still waiting for Hezbollah’s General Hassan Nasrallah’s statement and comments, specifically about asking Prime Minister Diab to hasten in asking the International Monetary Fund for aid. Here it is important to note that all parties concerned know about the political and economic reform conditions that the "fund" will impose, and which have not yet been approved by Hezbollah.

The Bloc stressed that all the aforementioned only brings us back to the main condition of any plan’s success: trust.  As it is today citizens do not trust the parties in power, whether inside or outside the government, the partisans in government don’t trust each other, and no investor or donor will trust an economic plan that avoids political and penal liability if necessary. The Bloc asked: “No thinking person can expect the same parties that squandered and stole public funds to stand in the face of corruption.”

In conclusion of its statement, the Bloc considered that the solution remains with an independent, sovereign government with legislative powers that can win back the trust of a people that has proven its ability to organize and initiate under all circumstances to form Lebanon’s future.