Crisis will further weaken Lebanon’s legal system

Significance

Prime Minister Najib Mikati, who has backed Salameh, on January 12 denied accusations that he had interfered with the judiciary in his case. Mikati is also struggling to break a government paralysis as Shia parties Hezbollah and Amal block his efforts to convene the cabinet in protest over another judicial investigation, into the Beirut port blast.

Impacts

• Mikati needs Shia parties’ backing to achieve a two-thirds cabinet quorum -- and their allies' resignations would bring down the government.
• If Bitar is replaced in a political compromise, loss of international legitimacy will make it hard for Western governments to provide aid.
• A new central bank governor may be required if Swiss and French investigations find Salameh guilty of embezzling public funds.
• The financial crisis is set to deepen further because of the political paralysis, and the currency will likely reach new lows.
• Election results will be unpredictable and contested, likely leading to more instability and protracted negotiations over power.