His Excellency Al-Shami, the Lebanese Deputy Prime Minister, said on Friday that the deputies of the governor of the Central Bank of Lebanon will have to run the bank in the event that his successor is not appointed by the end of the month, describing their threat of collective resignation as a serious matter.
Long-time governor Riad Salameh’s term expires at the end of July, and one of his deputies told Reuters on Thursday that they are considering resigning en masse if a successor is not appointed, raising the prospect of leaving the central bank leaderless amid a deep financial crisis.
Efforts to find a successor to Salameh are complicated by political tensions and the collapse of the regimes in Lebanon. Salameh’s accusations at home and abroad of embezzling public funds cast a shadow over his 30-year tenure. Salama denies the charges against him.
Al-Shami said in a statement to Reuters that the governor’s deputies must “assume their responsibility in the event that this appointment is not possible… The threat of resignation that the statement alluded to is very dangerous at this critical juncture.”
Al-Shami said that the Lebanese Monetary and Credit Law stipulates “very clearly” that the first deputy assumes the responsibilities of the ruler in the event that this position becomes vacant. “One cannot pick and choose from the monetary and credit law,” he told Reuters.
The governor of the Central Bank is appointed according to the sectarian quota system, to which appointment to other senior positions is also subject.
The ruler must be a Maronite Catholic, while the four deputies, one Shiite, one Sunni, one Druze and one Armenian Catholic, must obtain the approval of the political leaders who represent their sects.
Some analysts wondered whether the threat of deputies in a statement to resign would prompt the political elites, who have worked closely with Salameh for decades, to consider extending his term. Salameh said he will leave the post when his term ends.
“The most likely scenario behind such a statement is pressure to extend Salame’s term,” said Nabil Boumonsef, deputy editor-in-chief of the Lebanese newspaper An-Nahar.
“A complete vacuum in the central bank’s leadership will lead to the worst period of Lebanon’s financial crisis so far. The governor’s deputies are playing Russian roulette,” Boumonsef told Reuters.
One of the bank’s deputy governors denied that the aim of the statement was to press for consideration of extending Salama’s mandate. “Our message was clear. We want the political class to do the necessary and appoint a new ruler,” he said, asking not to be named.
Some cabinet members, including Chami, said Salameh should resign after France issued an arrest warrant for him as part of a fraud investigation.
Many Lebanese hold Salameh responsible for the financial collapse along with the ruling elites. Salameh says he was a scapegoat for this collapse that followed decades of corruption and wasteful spending on the part of the ruling elite.
This economic collapse destroyed about 98 percent of the value of the Lebanese pound and paralyzed the banking system, with most depositors’ savings frozen.
The International Monetary Fund said that special interests in Lebanon obstructed the financial reform program, which would have opened the door for the fund to grant Lebanon a financial rescue package worth three billion dollars.
2023-07-07 12:17:24
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