Former Economy Minister Alain Hakim warned that Lebanon’s financial and banking crisis cannot be solved through political slogans or hastily drafted laws, saying any recovery plan must be grounded in a rigorous assessment of available liquidity rather than unrealistic promises.

In a press interview, Hakim said that the heart of the crisis lies in a mismatch between political rhetoric and economic reality. He cautioned that legislation aimed at addressing depositors’ losses would be meaningless without a serious Liquidity Stress Test to determine what funds are actually available.

“Any legislative approach that does not begin with a genuine liquidity assessment remains a purely theoretical exercise that cannot be implemented,” Hakim said. “Depositors’ rights are not defined by good intentions or political pledges, but by the real capacity to pay.”

He said three factors must guide any solution: the liquidity currently on hand, potential sources of new liquidity, and the timing of repayments or what financial experts refer to as the availability of funds.

Passing laws before carrying out such an assessment, he argued, would be “like writing a check and then trying to find the money to cover it,” adding that this reversed logic was the same mindset that led to Lebanon’s economic collapse in 2019.

Hakim also took aim at proposals to tap the Central Bank’s mandatory reserves to compensate depositors, insisting that these funds belong to banks and their clients, not to the State.

“Mandatory reserves are private property,” he said. “They were placed with the Central Bank as a safeguard for liquidity and solvency, not as an open pool to finance government obligations.”

Depleting those reserves, he warned, would amount to forced confiscation of private assets and would further erode confidence in the banking sector.

Such a move would not only weaken the financial position of banks, he said, but would also deter any future investment.

“No investor will inject money into a sector where assets can be seized by administrative decision,” Hakim added.

He argued that depositors should not be made to pay the price for years of corruption, poor governance and state mismanagement.

On the issue of bank restructuring, Hakim criticized the current lack of transparency, saying the continued ambiguity surrounding the sector only prolongs uncertainty and delays any meaningful recovery.

Turning to political promises to reimburse depositors up to $100,000 each, Hakim expressed deep skepticism. While acknowledging that the figure sounds attractive, he said it has no credible financial backing.

“The question is simple: where will the estimated $20 to $22 billion needed to fulfill this promise come from?” he asked.

Lebanon’s economy, he noted, is not generating growth or budget surpluses, and the state relies on direct taxation for nearly 80 percent of its revenues without any real effort to revive economic activity.

Hakim stressed that the Lebanese State is not a neutral party in the crisis, but a central contributor to the financial gap. He said any genuine solution must include comprehensive reforms to public finances, restructuring of the bloated public sector and a clear commitment by the government to repay its debts to the Central Bank.

“Without realism and accountability, there will be no recovery,” Hakim said. “What Lebanon needs is a credible plan based on facts, not empty promises.”