Bankers keep their cool as Lebanese stand-off continues
Lebanese banks have maintained a comfortable financial position despite last year’s Israeli attack and a continuing stand-off between Hizbollah and the government. However, the macroeconomic situation is far from rosy, not least because the country has the world’s highest debt-to-GDP ratio. James Drummond reports from Beirut.
FOUR MONTHS ON and the tent city that Hizbollah, the Shia militant group, set up last year in Beirut, the Lebanese capital, is still blocking the city’s administrative centre. The positioning of the tents in the heart of the reconstruction zone near the seat of government is a calculated show of defiance.
Near the tents, Lebanese soldiers, protected by armoured personnel carriers mounted with machine guns, have laid miles of razor wire to guard the Serai, the Ottoman-era palace that houses the government of prime minister Fouad Siniora.
True, the tents are for the most part deserted and the bedrolls inside are rolled up. The only signs of life are a few teenagers kicking a football around under an awning. But Hizbollah showed on December 1 2006 that it could bring 800,000 of its supporters into the centre of Beirut and choke economic and governmental activity out of the city.
Just ahead of the rally, Moody’s downgraded the financial strength rating of the three banks it rates in Lebanon to D–.
And as finance minister Jihad Azour, interviewed in his office in the Serai, says, every minister still serving in the Lebanese government is the subject of a death threat from Hizbollah.