Berri grants Mikati "exceptional powers" against depositors

Caretaker Prime Minister Najib Mikati, with implicit exceptional approval from Speaker Nabih Berri, has presented a "legal and constitutional heresy of significant caliber," according to the description of one of the renowned legal experts specializing in monetary and lending laws and central banks, especially considering that the caretaker government is supposed to operate within narrow limits.

In last Tuesday's session, the government approved a special decision to impose capital controls on withdrawals and bank transfers, based on a request from Caretaker Minister of Finance, Youssef Khalil (the Shiite duo). 

 

The government requested that Riad Salameh, the governor of the Banque Du Liban, to immediately implement the decision to set limits on withdrawals and transfers in accordance with the circulars of the central bank, as the draft law on "capital controls" has been delayed in parliament. 

As mentioned by government sources, the objectives of the decision include "preserving the capabilities and reserves of banks in foreign currencies (in US dollars) from being depleted."

Cash, banking, and legal sources have all agreed in contacts with "Nidaa al-Watan" that what Mikati and Khalil (and behind them Berri) have proposed aims to "legitimize the serious violations committed by Riad Salameh since the beginning of the crisis through special circulars on withdrawals and their ceilings, outside any law that regulates them with justice and transparency, and with convincing justifications and agreed-upon timeframes." 

The decision also aims to "protect banks from lawsuits by depositors because they apply these illegal circulars with de facto authorities only, and special protection from judges who serve the intersecting interests of the political and banking system, disregarding the basic principles of justice."

In addition, specialized sources in monetary, lending, and central banking laws have confirmed that the government decision "violates the central bank's independence. Relying on articles in the Monetary and Lending Law (70, 71, and 174) is nothing but an attempt to openly cover up the blatant violations that have been committed since the beginning of the crisis, and the depositors have paid dearly for them, especially the forced haircut (haircuts) of up to 85% and compulsory conversion to lira for dollar deposits."

According to banking sources interviewed by "Nidaa al-Watan," it clarified that what Mikati has done, in coordination with Berri, was one of the promises made by Mikati to the banks when convincing them to end their strike. 

This decision, which serves the interests of the banks at the expense of depositors, is added to another previously issued by Mikati, in which he requested the judicial police not to cooperate with judges who issue decisions and judgments against non-compliant and negligent banks, especially those affecting small depositors.

The sources asked, "How did Berri, who has always strongly opposed granting any government exceptional powers since the 1990s until today, approve of what Mikati has done with this action?"

It is worth noting that the "capital control" in the illegal formula approved by the government does not have the approval of the International Monetary Fund, which clearly indicates that reaching an agreement with the IMF is no longer a priority for the current ruling system, which previously ignored the IMF's observations on the formula that the amendment of the banking secrecy law came out.