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Two senior officials of the crisis-hit nation’s main financial institution told AFP on Thursday that the vice-governors of the central bank of Lebanon intend to step down unless politicians immediately nominate an incoming governor.
Riad Salameh, the central bank’s troubled three-decade chief, will step down this month with no apparent replacement, laying the stage for a leadership crisis nearly four years into Lebanon’s terrible economic collapse.
Due to the sensitive nature of the subject, a central bank official who asked to remain anonymous claimed the four vice-governors planned to step down by prior to the expiration of Salameh’s term to exert pressure on the government to appoint a new governor.
The vice-governors will step down before (Salameh’s) term expires on July 31 unless the political class selects a replacement, the official stated.
It is necessary to name a genuine governor because this institution cannot function without a leader.
Salameh, 72, who was once regarded as the protector of the nation’s financial stability, is sought after by France and Germany in relation to alleged financial irregularities. But Lebanon doesn’t hand over its citizens for extradition.
Salameh has been the focus of judicial inquiries into claims of theft, money laundering, fraud, and illicit enrichment both domestically and internationally. He disputes the charges.
Regardless of the allegations made against him, his time is about to end.
In a statement earlier on Thursday, the vice-governors asked officials to select Salameh’s replacement “as soon as possible” and threatened to “take appropriate action” if they failed to do so.
In a statement released jointly, the vice-governors stated that the “caretaker rule cannot apply to the highest monetary authority.”
Since last year, Lebanon has been run by a caretaker ministry with few powers and no president; appointing a senior official might require months of political wrangling.
Political figures ‘purchase time’
On the proposal of the finance minister, the central bank governor in Lebanon is appointed by cabinet decree for a six-year term that may be extended numerous times.
The governorship is customarily held by a Maronite Christian in a nation where sectarian power-sharing exists.
The first vice-governor must assume leadership if the seat is vacant, according to the law.
First vice-governor Wassim Manssouri, however, has reportedly declined to assume the caretaker position, which has no set duration, according to a central bank official. The official accused Lebanese politicians of putting off necessary reforms to revive the struggling economy.
The vice-governors will leave “without delay,” according to a senior official who also requested anonymity, since they “cannot shoulder this responsibility while the political class continues to buy time.”
The financial collapse and ongoing power vacuums in Lebanon have been generally attributed to the country’s conflicting political class.
Since Michel Aoun’s mandate expired last year, parliamentarians have failed twelve times to elect a new president due to a lack of a clear majority and fierce disagreements between the Hezbollah movement, which is sponsored by Iran, and its rivals.
The first central bank official stated, “If the political class is unable to appoint a central bank governor, then this means that it has no intention of implementing any reforms.”
The Lebanese state would be unable to function completely in such a scenario, further destabilising the nation.
Since 2019, Lebanon has been engulfed in an economic crisis that has caused the local currency to lose nearly all of its value in relation to the US dollar and plunged the majority of the population into poverty.
The International Monetary Fund issued a warning last week, stating that Lebanon’s refusal to carry out reforms might have “irreversible” effects and threaten social and economic stability.
