Majalat
Lebanon
Economic development and social dialogue

While the country is experiencing one of the worst economic crises in the world since the 1980s, the Lebanese Deputy Prime Minister, Saadeh Al Shami, said Sunday that “the state and the Bank of Lebanon (BDL) are bankrupt.”

In a televised interview broadcast on Sunday on Al-JadeedTV, Al Shami said that “the state is bankrupt, as is the BDL, and there are losses,” adding that “the distribution of the losses will be charged to the concerned actors, namely the state, the BDL, the banks and the citizens.”

Having provoked widespread national and international reactions, these remarks were denied by the number two in the government, who claimed that his statement “was incomplete.”

The next day, Prime Minister Najib Mikati said that Al Shami“wanted to talk about liquidity and not the solvency of the state.” The governor of the BDL, Riad Salameh, issued a statement stressing that “despite the losses that have affected the Lebanese financial sector, and which are being addressed in the framework of a recovery plan prepared by the current government in cooperation with the International Monetary Fund, the BDL continues to exercise its role under Article 70 of the Code of the currency and will continue to do so.”

It is worth noting that in 2020, Lebanon defaulted on the portion of foreign currency debt that represents more than 37% of the total nominal value of the debt.