Economic rescue plan will leave 98 pct of depositors untouched: Lebanese PM

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Lebanese Prime Minister Hassan Diab said on Thursday that 98 percent of depositors will be left unscathed by an economic rescue plan that has come under heavy criticism in part because of a proposal to tap deposits to cover huge losses.

A draft plan that emerged last week provided the most detailed blueprint yet on how Lebanon would seek to pull itself from a deep financial crisis that has sunk its currency and led to a sovereign default.

Among the politically difficult measures in the draft was a proposal for “a transitory exceptional contribution from large depositors” to help plug losses in the banking sector, estimated at $83.2 billion.

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In a televised address on Thursday, Diab sought to reassure Lebanese already hit by rising prices, soaring unemployment, and capital controls that have cut access to their savings, pledging that most of their deposits were safe.

“After in-depth studies and based on figures from the end of February 2020, I can announce today that no less than 98 percent of depositors will be unaffected,” said Diab.

He said that “all proposed solutions” were on the table as the rescue plan was finalised in order to “relieve people who are bearing today the price for the wrong decisions, indebtedness and financial engineering of the past.”

Diab said depositors’ money “evaporated” in the months before his new government was formed on January 21.

“No one will lose their deposits, but when they will get them depends on the restructuring plan,” he said after a Cabinet meeting.

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