France warns Beirut against ‘reckless’ moves after PM plan to fire bank governor reported
France has intervened in a brewing Lebanese crisis, advising the government not to fire the under-pressure central bank governor after the country’s currency plummeted.
Prime Minister Hassan Diab on Friday expressed dismay at the currency’s fall and questioned the performance of Riad Salameh.
Mr Diab called on him to clearly explain to Lebanese citizens where policy was headed.
The prime minister said the crisis-hit country had suffered $7 billion (Dh25.70bn) in additional losses since the start of the year and that liquidity in the banking system was running out, with $5.7bn in Lebanese deposits exiting in January and February.
Mr Diab said it was urgent that an economic reform plan, a draft of which emerged earlier this month, be passed quickly to avert further crisis.
But Paris reportedly stepped in to advise Mr Diab against any “reckless” move after allegations that he planned to dismiss the governor over the deteriorating financial conditions, Al Joumhouria newspaper reported yesterday.
The French intervention was “direct”, the newspaper reported. The Lebanese were against such “an impulsive move” after reports revealed Mr Salameh could be removed from his position.
The report did not state whether France’s message solely represented that of the French government or allies of Paris such as the United States or Britain as well.
Mr Salameh has been accused of contributing to heavy borrowing that led to the country’s sovereign debt increasing and which in March resulted in its first default.
Lebanon will extend a Covid-19 lockdown until May 10, but Mr Diab said the economy would be reopened in gradual phases over the coming weeks. The country ordered most businesses to close, shut Beirut airport and imposed an overnight curfew to curb the spread of the novel coronavirus.
“It is time for us to start reopening our country. We all want our normal lives back. People and companies are struggling,” Mr Diab said.
Calling for caution to avert a second wave of infection that could “destroy the country”, Mr Diab said the government had performed a risk assessment on what sectors could be slowly reopened in the coming weeks.
Earlier on Friday, Lebanon’s Higher Defence Council laid out a five-stage timetable for reopening the economy, with the first moves beginning tomorrow and the last on June 8.
Also on Friday, the authorities closed all entrances to an overcrowded Palestinian refugee camp in eastern Lebanon after four more people tested positive for the coronavirus, heightening concerns the virus could continue to spread. The four infected with the virus were relatives of a woman who tested positive last week and are isolating inside their home, a statement from the UN agency for Palestinian refugees said. It said they did not need hospital treatment.
The Palestinian woman who was taken to a hospital in Beirut this week was the first refugee living in a camp in Lebanon to contract the virus, a finding that triggered a spate of testing.
All five confirmed cases are in people who live in the Wavel camp in the city of Baalbek, known locally as the Jalil, or Galilee, camp.
Lebanese Prime Minister Hassan Diab questioned Riad Salameh’s performance