Lebanon’s Hezbollah Says Government Must Stay As Protests Spread

(Bloomberg) — Lebanon’s Iranian-backed Hezbollah said the government should not resign as protests entered a third day, but work together to resolve an economic crisis that has brought the country to the brink of bankruptcy.

Hezbollah chief Hassan Nasrallah warned that the group’s ministers and lawmakers would not allow poorer Lebanese to bear the brunt of an economic overhaul through higher taxes that would cause a social explosion.

As Nasrallah’s comments were being broadcast on Lebanese television channels, protesters streamed back onto the streets, waving flags and demanding the removal of a political elite whose cronyism they blame for the country’s economic hardships. Demonstrators converged once again on Beirut’s central business district, home to bank and government headquarters, where rioters clashed with police late into the night Friday. Dozens of people were arrested as masked youths broke windows and set fires.

Protests erupted Thursday night after the government said it might impose a fee on Whatsapp calls as part of broader efforts to shore up government revenues. Also under discussion are plans to increase Value-Added Tax and fees on gasoline. Highlighting the depth of anger with political elites, the demonstrations have cut across the sectarian and party lines that normally dominate political action in Lebanon. Unrest has spread to strongholds of political figures including parliamentary speaker Nabih Berri and his Hezbollah allies in the south.

High Stakes

The economic stakes are high for Lebanon, a tiny country that straddles the geopolitical fault-lines of the Middle East and has struggled to emerge from the shadow of a 15-year civil war that ended in 1990. One of the most indebted countries in the world, it needs to find fresh sources of funding as the foreign inflows on which it has traditionally relied have dried up. With the economy slowing and living standards falling, anger has grown at politicians who protesters say have lined their pockets at the public’s expense.

The protests have increased pressure on a fractious coalition government that has struggled to overcome sectarian and political differences to cut spending, raise taxes and restructure loss-making public enterprises — measures required to unlock $11 billion in international aid pledges.

Hezbollah and its allies in government are reluctant to accept tax increases to spare their supporters further economic pain amid tightening U.S. sanctions on the group’s members and on its patron, Iran. Nasrallah said Saturday that he would not back down from that position a day after Prime Minister Saad al-Hariri gave his rivals in government 72 hours to get behind his economic reform program.

Politicians have responded to demonstrators by asking for more time to make the necessary changes but investors and donors are increasingly skeptical the government can carry out reforms such as restructuring an ailing electricity sector that costs the treasury some $2 billion a year.

Hariri’s party-affiliated website said the premier is holding talks with his team and could convene a session with other groups to discuss a way out of the crisis.

Though the protests have put Hariri under pressure to resign, his rivals in government want him to stay.

In a veiled threat to Hariri and his allies, Nasrallah said there was no time to waste on new elections and coalition-forming and those who try to flee their responsibilities after years in power should be put on trial.

“A new government would be the same as the old one,” Nasrallah said. “Everyone must accept responsibility and take part in finding a solution.”

To contact the reporters on this story: Lin Noueihed in Cairo at [email protected];Dana Khraiche in Beirut at [email protected]

To contact the editors responsible for this story: Lin Noueihed at [email protected], Abbas Al Lawati

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