May 7, 2019 / 7:29 AM / 2 months ago

UPDATE 1-Lebanese central bank workers near decision to lift strike -union chief

(Adds trading still halted on stock exchange, Hariri comments)

BEIRUT, May 7 (Reuters) - Lebanese central bank employees are moving towards a decision at their general assembly meeting on Tuesday to suspend a strike and resume work, their syndicate chief told Reuters.

They walked out on Monday over government budget proposals that would cut their benefits, part of a wave of industrial action and protests ignited by fears of plans for big spending cuts by the heavily indebted state.

The strike led to a suspension of trade on the Beirut Stock Exchange for a second day on Tuesday because the transaction clearance and settlement process could not be completed on time.

“We are moving towards suspending the strike...temporarily until the negotiations end with what is required,” Abbas Awada, head of the central bank workers’ syndicate, said in a phone call.

He cited positive developments in contacts with officials and said central bank employees wanted to show good will and to “relieve the market”.

Awada said work would resume after a news conference that will follow the general assembly meeting, which was due to convene at 9:30 a.m. (0630 GMT).

A source at the Beirut Stock Exchange said trading remained suspended until work returned to normal at the central bank.

The source said that if the strike was lifted on Tuesday the stock exchange would issue a circular saying trade would resume as usual on Wednesday. “Certainly today there is no trade,” the source said.

Saddled with one of the world’s heaviest public debt burdens, the Lebanese government is debating a draft 2019 budget which Prime Minister Saad al-Hariri has said might be the most austere in the country’s history.

Hariri, in a late night news conference on Monday after a meeting with the president and parliament speaker, said failure to pass a “realistic” budget would be like a “suicide operation” against the economy.

Hariri said he expected a resolution of the dispute at the central bank on Tuesday but criticised a wave of “pre-emptive” strike action over the draft austerity budget. He said the government was taking measures to avoid economic collapse.

The public sector wage bill is the state’s biggest expense, followed by the cost of servicing the public debt. Army retirees have been among the opponents of the draft budget, which they fear may target some of their benefits.

Hariri also said Lebanon was “far from bankruptcy” and though the country could not continue in this situation this did not “mean we will collapse tomorrow”. (Reporting by Tom Perry Editing by Mark Heinrich)

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