President of the Republic, General Michel, affirmed his support for efforts and logical solutions to address the current economic crisis, expressing his hope that the completion of the demarcation of the southern maritime borders and the extraction of gas from the territorial waters will move the country to a stage of promising hope for the future.
The President stressed the need to make every effort to form a new government or to strengthen the existing government with six new state ministers from among the politicians, “Which was proposed by the Prime Minister-designate at the beginning, then the situation changed”.
President Aoun also stressed the need for the system to be productive and not allow negligence and inefficiency to address the existing imbalance at all levels.
The President’s words came while receiving a delegation of Lebanese economic bodies headed by former Minister Mohamed Choucair.
Choucair handed President Aoun the financial and economic recovery plan developed by the bodies, which includes ways to return depositors’ money in stages, in order to return the country to the path of recovery again.
At the beginning of the meeting, former Minister Choucair spoke, thanking President Aoun for receiving the delegation, pointing out that the economic authorities had decided to prepare a plan for financial and economic recovery that includes ways to return deposits of depositors. Choucair expressed his readiness to discuss it with an economic team chosen by the President of the Republic, saying: “We are not the first country to stumble, but we are the first and only country that did not witness an attempt to address the stumbling, in light of the existing political differences that greatly affected various economic aspects in addition to national institutions and investments in it”.
Choucair then revealed that the plan was prepared by a 13-person working group that included heads of key sectors and economic and legal experts.
Then the member of the delegation, head of the National Council of Lebanese Economists, Mr. Salah Oseiran, explained the aspects of the plan, pointing to the attempt of the team that prepared it to be realistic in its view of the banking situation in Lebanon, and to give hope to depositors to recover their money in stages, after agreement with the International Monetary Fund. Oseiran stressed the need for a minimum level of political consensus to proceed with it.
Oseiran also pointed out that the plan takes into account the various responsibilities and attempts to obtain a fair contribution from the various stakeholders, noting that according to the plan, the state will exit the restructuring process with a debt-to-gross ratio of about 50%, which will allow it to return in the future to the multilateral international financing markets, to stimulate its economy, the expected contribution from the state in its framework depends largely on the success of asset management companies and on bonds that do not have a maturity date so as not to burden them.
In response to a question by President Aoun, Mr. Oseiran revealed that under the plan, citizens are not entitled to own shares in state companies because they do not have a right to own them, revealing that this point is still under discussion among those concerned, especially in light of the refusal of the International Monetary Fund to use state property to return funds to depositors. “As for the banks, after recapitalizing them, part of the deposits can be transferred to shares or the large depositor can hold bonds in them” Oseiran said.
Likewise, the Secretary-General of the Economic Bodies, the head of the Beirut Traders Association, Nicolas Shammas, explained some points related to the plan.
President Aoun:
For his part, the President welcomed the delegation, stressing that he supports every scientific and logical measure that addresses the current crisis, expressing his hope that the completion of the demarcation of the southern maritime borders and the extraction of gas from regional waters will move Lebanon to a stage of promising hope for the future.
In addition, President Aoun stressed the need to make every effort to form a new government, or to strengthen the existing government with six new state ministers from among the politicians, “Which was initially proposed by the Prime Minister-designate, given the absence of politicians in the existing government, then the situation changed”.
Then a dialogue took place between President Aoun and the audience, where he was asked about the response to the banking secrecy amendments law. The President explained that he had responded to the law and made notes on it that he found appropriate to add.
Regarding the failure to take into account the 2022 budget any economic development plan and the need to give the various sectors the necessary incentives to protect the economy, President Aoun recalled the misleading attempts that some had practiced not to reveal the real reality of the lira, and to evade the criminal financial audit, stressing that in our demand for this audit we wanted to search for the truth.
In response to another question, President Aoun referred to the negative repercussions of the rentier economy on the economic reality of the country, pointing out that he had sought since the beginning of his term to move to a productive economy and had been met with government sterility, which was also met with the reforms and decisions of the CEDRE conference, in addition to addressing the budget deficit and other issues and matters. The President stressed the need for the system to be productive and not allow negligence and inefficiency in any case.
The delegation included former Minister Choucair, Messrs. Oseiran and Shammas, Messrs. Tawfiq Dabboussi, President of the Chamber of Commerce, Industry and Agriculture in Tripoli and the North, Nabil Fahd, Vice President of the Chamber of Commerce, Industry and Agriculture in Beirut and Mount Lebanon, and Gabi Tamer, Vice President of the Chamber of Commerce, Industry and Agriculture in Beirut and Mount Lebanon, Mounir El-Tini, Vice President of the Chamber of Commerce and Industry in Zahle and the Bekaa, Pierre Ashkar, President of the Federation of Tourist Syndicates, Wajih El-Bizri, President of the International Chamber of Commerce-Lebanon, Jacques Sarraf, President of the Lebanese Investors Union, Nicolas Boukhatir, President of the Association of Lebanese Businessmen and Women, Elie Nisnas, President of the Association of Insurance Companies. In Lebanon, Alphonse Deeb is the secretary of the economic authorities, and Hisham El-Makmal, the tax advisor to the Lebanese economic authorities.
Statement:
After the meeting, Minister Choucair and Shammas made the following statement:
“The economic authorities were honored to meet His Excellency, and presented him with a financial recovery plan that shows how to return the money to the depositors.
We found that it is our duty to take the initiative, because citizens ask daily when to recover their money, and how much will be returned, and over how many years?
We have drawn up a realistic, executable plan, far from slogans and populists, because the country is no longer able to listen to more of them. This plan was studied in the presence of more than 13 personalities of experts and economists, in addition to legal men, to see if the numbers presented is feasible and achievable. We hope His Excellency the President will support this plan, and we hope that within two weeks everyone will put populism aside so that we can salvage what can be salvaged in this country.
After that, Mr. Shammas said:
“The economic authorities are willing to participate in the national economic recovery, so their achievements and suggestions have accumulated with the previous government’s plan. For this purpose, we have set two goals in mind: protecting depositors’ money, and launching economic growth in the country. Among the principles, including: respect for private property and the hierarchy of responsibilities, because there is more than one responsible team in the country. We proceeded from the number of dollar deposits currently in banks, and if we deduct from them the amount of loans to the private sector, the total volume remains at about 84 billion dollars which is what must be resolved.
The solution proposed by the administrative bodies is divided into 5 parts: the first part is about $12 billion, which is the interest surplus that was paid between 2015 and 2020 as a result of financial engineering, which must be closed at the price of 1500 dollars. The second part is about 16 billion Dollars, are money that was transferred after October 17, 2019 from the Lebanese Lira to the Dollar at the rate of 1500 and it is not permissible to return as fresh, because we are eating from the deposits of the original depositors. These funds will return at the end of the seventh year at the exchange rate of 8000 Lebanese pounds to the dollar.
As for the third measure, it is similar to Circular 158 and its size is 19 billion dollars, according to which three quarters of their money in dollars and under deposits will be refunded, three quarters of their money in dollars and a quarter in Lebanese Liras based on the market price. Banks will bear this measure, by about a third, and the Banque du Liban is in two-thirds.
The fourth measure remains, and it falls exclusively on the banks, and its cost is about 7 billion dollars, 4 billion of which will be fresh, which will be returned over a period of 5 years, and 3 billion dollars will be returned to depositors in the form of bonds issued by the bank or shares in it. The most prominent part of the plan is the state’s contribution to returning part of the funds to depositors, and the size of this part is 30 billion dollars. The state will establish a holding company: “Holding”, in which the ownership of about 15 public institutions in various sectors from electricity to water and communications to companies will be preserved.
We clearly say that the state’s money will remain with it, but the management of these companies will be with the private sector. When these companies produce revenues higher than international levels, these funds go to feed the fund to pay depositors’ money. And every depositor has a bond and a debt bond that entitles him, over a period of 10 to 12 years, to recover his money in full. The main advantage of this measure is that it is not an additional debt on the state, nor does it constitute additional burdens. The big negotiating point with the IMF will be on this subject. And if these things went well, and the political and economic conditions were favorable, the Lebanese depositor could recover 74% of his money”.
Questions & Answers:
Minister Choucair was asked about the absence of a representative of the Association of Banks among the members of the delegation, and he replied: “Dr. Sfeir has a commitment, and we learned yesterday of our appointment with His Excellency the President. But the Association of Banks kept pace with this plan, and approved it. If we single out our opinion, and the IMF did not agree with it, or we set a vision and the banks cannot bear it, it is as if we had not done anything. We have held the banks responsible, but we have to preserve our banking sector. No economy, nor Lebanon, nor a country, nor companies, nor a private sector will remain without a strong banking sector”.
Choucair was asked about the response they receive after presenting the plan, where he replied: “As I said, there is support for the plan, because it does not contain slogans or populism. We want to find a solution. As economic bodies, we are responsible for the private sector and the country’s economy. We see that if we reach some kind of political agreement can get us out of the crisis. We are not the first country to suffer an economic collapse, but we are the first country to collapse in 3 years, and we have not yet done anything. This is the crime against the depositor and the Lebanese people”.—Presidency Press Office
