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Thursday, Jul 29, 2021

As Lebanon nears collapse, EU debates sanctions

As Lebanon nears collapse, EU debates sanctions

Lebanon continues to unravel as its economic and political crisis worsens. The country has not had a government for almost a year now and its economy is in the process of collapsing after decades of mismanagement and corruption.

Over the past month, there have been stories both absurd and horrifying coming out of the small Mediterranean nation.

For instance, at the same time that the Lebanese army announced it would be offering tourists $150 (€126) helicopter rides in order to make some money, reports came from the northern city of Tripoli that gunmen were roaming the streets and setting up roadblocks.

Sad record

It is estimated that almost half of all Lebanese now live below the poverty line thanks to the ongoing crisis. An assessment released by UNICEF yesterday found that around 77% of Lebanese households don’t have enough food or enough money to buy food.

At the beginning of this month, the World Bank reported that, on a global scale, the Lebanese crisis might well be one of the three most severe since the mid-nineteenth century.

Since 2018, Lebanon’s gross domestic product (GDP) has plummeted, along with the informal exchange rate, World Bank researchers said. “Such a brutal and rapid contraction is usually associated with conflict or war,” they noted.

The Lebanese lira, or pound, is pegged to the US dollar, but that fixed exchange rate is not widely available, which has led to an informal currency market with unfavorable rates.

Most Lebanese blame their leaders for the crisis. After the end of Lebanon’s almost 15-year-long civil war in 1990, peace negotiations divided power between 18 religious sects there. The peace deal effectively set the stage for decades of corruption and the resulting near-collapse of the Lebanese banking system.


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