The Grand Serail in downtown Beirut. (Credit: Nabil Ismail/Annahar)
BEIRUT — Lebanon's caretaker cabinet is due to meet Wednesday to discuss multiple issues, including controversial topics such as "temporary compensations for the public sector and retirees" and the restructuring of the country's banks.
According to the official invitation to the meeting sent to the ministers by the Secretary-General of the Grand Serail, Mahmoud Makkieh, the country's caretaker ministers will "examine the draft law regarding the situation of banks and their restructuring" as one item on an agenda consisting of 27 points.
The restructuring of the banking sector and the distribution of Lebanon's financial losses, estimated to be over $70 billion, have been consolidated into a single draft law. Initially, there were plans to separate these two initiatives into distinct laws.
The 60-page document includes certain "exceptional measures" aimed at rebalancing the banks' balance sheets (Article 58). It outlines the procedure for delisting in case a bank fails to propose a credible plan to recover its finances and provides for the creation of a deposit restitution fund. Another highlight is the clear distinction made between deposits in foreign currency that existed before Oct. 17, 2019, and those made after that date, converting some funds into Lebanese lira, for example, when the system was already facing difficulties.
The project requires banks to guarantee a gradual repayment to depositors of assets up to $100,000 for the former and only $36,000 for the latter.
Another agenda item is the provision of "temporary compensations to all public sector employees and retirees." Many employees from various public administrations are striking to demand salary increases, while retired military personnel have also protested over the value of their pensions.
Ministers will also have to decide on a request from caretaker Foreign Affairs Minister Abdallah Bou Habib, regarding the suspension of work in certain diplomatic and consular missions.
Caretaker Justice Minister Henri Khoury has submitted a request to "appoint a French lawyer to represent the Lebanese state in France." This lawyer will be responsible for defending the state after former central bank chief Riad Salameh filed an appeal against the decision of the investigating judge in Paris to seize his movable and immovable assets in France.
Two lawyers, Emmanuel Daoud and Pascal Beauvais, were appointed in June 2023 in this case, but they are not authorized to represent the state before the Court of Cassation. Another lawyer, Catherine Bauer-Violas, recommended by Beauvais, has agreed to represent Lebanon pro bono, but this appointment must be approved by the government. According to our information, the head of the state's legal department has signed the contract with Bauer-Violas and sent it to the justice minister, who approved it before referring the matter to the cabinet.
The government was supposed to meet last Friday to discuss this agenda, but the meeting was postponed, partly due to the blockade of access to the Grand Serail by army veterans and, according to press reports, disagreements among ministers regarding the banking restructuring project.