The National Bloc: Parliamentary Committees Exempt Banks from Losses and Place the Burden on the Lebanese People

The National Bloc released the following statement:

The National Bloc warns that the draft laws presented today before the joint committees in the Parliament, ostensibly intended to address the financial crisis, effectively constitute a blatant attack on the social security of the Lebanese people, as well as on the assets and properties of the Lebanese state, and the principles of accountability and responsibility.

These laws, on one hand, will transfer all the banking sector's losses to the Lebanese state, meaning to the Lebanese people who will have to pay for them. This will be done without distinguishing between eligible or rightful deposits and those not rightful, which resulted from corruption, excessive interest rates, and financial engineering. This will be achieved by selling state assets or investing their returns and consequently imposing additional taxes on all citizens, including depositors, to compensate for state revenues. All this comes with a promise to return the deposits after many decades, or rather, what remains of them after being significantly devalued (i.e., withdrawn at an exchange rate equivalent to 15% of their real value).

Additionally, these laws will expose the Central Bank's foreign assets, including gold and foreign currencies, to the possibility of legal seizure, which will inevitably lead to a further deterioration in the exchange rate and the economic situation.

On the other hand, these proposed laws will exempt Lebanese banks from legal accountability for all their violations against depositors and from the necessity of restructuring themselves (including the injection of funds by shareholders to cover losses) and from their responsibilities to return deposits to their owners. They will also entrench the final separation between new dollars (fresh) and old dollars (lollars), with the political and banking system promising to return the latter "after the situation improves." They shamelessly ask the Lebanese people to renew their trust in the political authority and the banks' management of the financial and economic crisis, the same management that led to the bankruptcy of both the people and the state.

Therefore, any recovery plan must start with the legal accountability stipulated in the Code of Money and Credit, the restructuring of the banking sector, distinguishing between legitimate and illegitimate funds, and recovering as much of the funds smuggled abroad as possible to rebuild the majority of deposits. It should also include structural reforms of the public sector and the tax system to make it more equitable.

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