Lebanon Entering `Financial Crisis'

Beiruit skyline

Lebanon’s plight is turning into a crisis that could ultimately threaten the Middle Eastern country’s economic foundations, according to its finance minister, reports Bloomberg.

“The crisis today has started to transform into a financial crisis from an economic crisis,” Ali Hassan Khalil was cited as saying by Lebanon’s state-run National News Agency. “We hope that it doesn’t turn into a monetary crisis that will lead to the Lebanese losing trust in their country’s future and their institutions.”

It's a typical story. The banksters are turning the screws and want citizens to pay more to support the government's huge debt. But there is also a twist of anti-Iranian posturing against its influence in the region.

Bloomberg presents the mainstream take:

A political stalemate that’s delayed formation of a government seven months after elections is undermining plans for reforms that would unlock $11 billion in aid for Lebanon. The impasse in one of the world’s most indebted countries comes as the central bank’s ability to paper over the crisis has been constrained by years of anemic economic growth, slowing foreign inflows and a surge in borrowing costs. 

Khalil’s political faction is allied with Hezbollah, an Iranian-backed group that is at the heart of the political crisis delaying the formation of Lebanon’s government by refusing to back down over its demands to have a meaningful representation in the cabinet.

-RW