Lebanon Faces Leadership Crisis as Central Bank Chief’s Term Nears End
As Lebanon continues to grapple with its ongoing economic crisis, the vice governors of the country’s central bank have called on authorities to appoint a successor to Riad Salameh, whose term as bank chief is set to expire at the end of July. This plea comes at a time when Lebanon is already facing political instability, with a caretaker Cabinet in place and no president since 2022.
Riad Salameh, once hailed as the guardian of Lebanon’s financial stability, has come under fire for allegations of amassing a personal fortune during his three-decade tenure. He is currently wanted by France and Germany for alleged financial irregularities. However, Lebanon does not extradite its citizens, leaving Salameh beyond the reach of international authorities.
The embattled central bank chief has been the subject of investigations both domestically and abroad, with accusations ranging from embezzlement and money laundering to fraud and illicit enrichment. Salameh vehemently denies these allegations.
With Salameh’s term set to end this month, Lebanon now faces the possibility of a leadership crisis at the central bank. In a joint statement, the four vice governors stressed the urgency of appointing a new governor as soon as possible, warning that they would take appropriate action in the public interest if no appointment is made.
Under Lebanese law, the central bank governor is appointed by Cabinet decree for a six-year term based on the finance minister’s recommendation. If no candidate is put forward, the first vice governor is expected to assume the role.
Traditionally, the position of central bank governor in Lebanon is reserved for a Christian Maronite in the country’s system of sectarian power-sharing. However, the vice governors argue that caretaker rule should not apply to such a crucial monetary authority.
Lebanon’s political elite, locked in a power struggle, has been widely blamed for the country’s financial meltdown and the resulting power vacuums. With no clear majority in parliament, lawmakers have failed 12 times to elect a new president, highlighting the bitter divisions between the Iran-backed Hezbollah movement and its opponents.
There have been reports in Lebanese media suggesting that the vice governors may resign once Salameh’s term ends to pressure authorities into appointing a new central bank chief. This move would allow them to avoid any responsibility for the consequences of Salameh’s departure from power.
The leadership crisis at the central bank comes at a critical time for Lebanon’s economy. The country has been grappling with a severe economic downturn for nearly four years, marked by skyrocketing inflation, a collapsing currency, and widespread unemployment. The financial crisis has pushed many Lebanese citizens into poverty and sparked mass protests against the ruling elite’s mismanagement and corruption.
The appointment of a new central bank governor is seen as crucial in restoring confidence in Lebanon’s financial system and implementing much-needed reforms. The incoming governor will face the daunting task of stabilizing the economy, attracting foreign investment, and addressing the deep-rooted structural issues that have plagued Lebanon for years.
As Lebanon stands on the brink of a leadership crisis at its central bank, the urgency to find a suitable successor to Riad Salameh cannot be overstated. The future of Lebanon’s economy and its people’s livelihoods depend on the swift appointment of a competent and trustworthy leader who can navigate the country through these challenging times.