United Nations warns Libya’s banking system at risk of collapse

UN — Libya’s banking system is “likely to collapse” if two parallel central bank branches in Libya are inconsistent and a ceasefire political negotiation could unravel the ceasefire, the UN special envoy of the United Nations said. I warned on Thursday.

Oil-rich Libya fell into turmoil after the overthrow of NATO-backed leader Mu’ammar Al-Kadafi in 2011. Since 2014, it has been split into an internationally recognized government in the west and a rival government in the east that has established its own system.

The split of the central bank, coupled with the lack of a unified budget, led both branches to build up debt to fund their respective administrations, said Libya’s UN Special Envoy Jan Kubis, UN Security Council. I told the meeting.

“This debt management is only possible if the central banks are integrated. Simply put, Libya’s banking system is likely to collapse without unification,” Kubis said.

Last week’s international audit of Libya’s parallel central bank branch recommended steps that could lead to a final unification. Kubis told the Security Council that the main finding was a unity that was “needed, not just recommended anymore.”

The reunification of the central bank is expected to help increase confidence among Libyan oil buyers when the prices of the country’s major exports are rising.

Oil revenues flow through the Tripoli-based central bank, which pays many state employees at the forefront. Libya’s oil exports were hit by an eastern-based military blockade last year, leading to a loss of income.

The UN-led peace process in Libya resulted in a ceasefire last year, after which a unified government was formed. However, this month’s talks aimed at paving the way for the Libyan elections in late December were stalled.

“The armistice agreement remains in place, but if the political process is stagnant despite a slight clash between armed groups and criminal gangs, the JMC (Joint Military Commission) unity and agreement can be broken. I’m worried that it might be possible, “Kubis said.

French Foreign Minister Jean-Yves Le Drian, who chaired the Security Council on Thursday, said the elections must take place in December and foreign troops must leave Libya.

“It’s time to implement a progressive, balanced and orderly time frame to depart foreign elements from both camps,” Le Dorian told a 15-member council. ..

Diplomats said last month that Turkey and Russia, which support the other side of Libya, had reached their first understanding of the gradual withdrawal of foreign fighters supported by them.

The presence of foreign mercenaries “continues to be the most important obstacle to Libya’s stability,” said Abdulhamid Dbeiba, the new Prime Minister of Libya.

Michelle Nichols

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