Central bank strike cripples Lebanon stock exchange

The Beirut Stock Exchange said Monday it had been forced to halt trading because of an open-ended strike by central bank employees over proposed cuts to their benefits. It said it would halt operations until further notice as it could not clear and settle trades because of the strike, which started on Saturday. “To protect the rights of investors, the Beirut Stock Exchange has decided to stop trading,” it said in a statement.

No shares changed hands on the exchange yesterday, it said on its website. Central bank employees say they are protesting a decision to slash their benefits as part of a new austerity package being studied by cabinet ahead of this year’s budget. Representatives of their syndicate met with central bank governor Riad Salame on Monday, it said in a statement. It said it would decide on its next steps during a meeting on Tuesday morning.

Syndicate head Abbas Awada said that this is the first such strike since the central bank was established in 1963. Other public sector employees have resorted to similar measures against possible austerity measures in recent weeks. Public sector strikes on Monday handicapped the Beirut Port, the National Social Security Fund, and other state-run bodies, as cabinet met to discuss the austerity package, according to the country’s National News Agency (NNA).

Lebanon has vowed to slash public spending to unlock $11 billion worth of aid pledged by international donors during an April 2018 conference in Paris. Last month, Prime Minister Saad Hariri vowed to introduce “the most austere budget in Lebanon’s history” to combat the country’s bulging fiscal deficit, sparking fears among public sector employees that their salaries may be cut.

Other officials, including Foreign Minister Gebran Bassil, have said that austerity measures will include public sector wage cuts. Finance Minister Ali Hassan Khalil on Monday said that the government is also mulling increasing the tax rate on interest payments from 7 to 10 percent as part of the new budget, according to NNA.