During a meeting of EU Foreign Ministers in Brussels earlier this week, the French Foreign Minister Jean-Yves Le Drian called for the EU to start the process of imposing sanctions on Lebanese officials who are hindering the resolution to the Lebanese crisis, and the Fresh Initiative that was kicked-off by French President Emmanuel Macron a few months ago. This is a major shift in the French Lebanon policy and a significant move from diplomacy to pressure.
Macron has been trying to reason with Lebanese officials to form a rescue government to implement reforms and manage aid programs to lift Lebanon from its current tragedy. However, Hezbollah does not seem to have the same goal – the group wants more control, not less, and the French initiative would certainly take away from their power.
France grew tired of Lebanese officials prolonging the government formation process and decided to move to a harsher position, and start the process of preparing sanctions. In a statement to Sky News Arabia, the French Foreign Ministry said that France “will not hesitate to act against Lebanese officials who have abandoned the public interest for their personal interests.” Additional measures could also be implemented, such as a travel ban on Lebanese politicians, in addition to freezing their foreign assets.
This shift is indeed significant, however it is not easy to implement. France decided to go through the EU instead of imposing direct French sanctions, which could be a more effective tool, but it will take more time – due to EU’s bureaucracy, and also needs the approval of the twenty-seven state members – which will add a serious layer of complications to the process.
Meanwhile, Lebanon does not have the luxury of time.
Imminent Risks
According to media reports emerging from Lebanon, the Central Bank’s reserves will dry out in a month and the state will be forced to stop subsidizing essential items. This means there will be more unemployment, inflation, and more people under the poverty lines – already more than fifty percent of the Lebanese are under the poverty line. The Lebanese pound has sunk by 90 percent and endangered key imports as dollars grow scarce. According to the World Bank, Lebanon’s economy faces an “arduous and prolonged depression,” with real GPD projected to plunge by nearly 20%.
What is more worrisome is that Hezbollah will not allow the Central Bank to stop subsidizing essential items, mainly fuel, medicine, and food, because these items are the main items the group smuggles from Lebanon to Syria. Hezbollah buys them at cheap prices in Lebanon – as they are subsidized – and then sell them at higher prices outside Lebanon, and thereby make much needed money, in the form of US Dollars.
However, when the Central Bank’s reserves dry out, Hezbollah has another plan. They will pressure the Central Bank to dig in the bank accounts in private banks. Eventually, the Lebanese people will be funding Hezbollah’s smuggling operations with money from their own savings – which they have lost access to since October 2019. Accordingly, Hezbollah will be able to sustain itself – to a certain extent – for another year or so, probably an ample time for the US-Iran nuclear negotiations to bear fruits.
With all these dynamics developing fast in Lebanon, Lebanon might not have the time for France to move the European sanctions through bureaucratic channels and waiting for everyone to get on the same page. It is already late for that, as Hezbollah has already taken over major state institutions and resources, and now they are after people’s money.
At the end of the day, the main problem in Lebanon is Hezbollah, and eventually Iran. Accordingly, Europe needs to look at the roots of the problem, not its branches.
Main Problem is Hezbollah
Even if sanctions were passed immediately, they will punish Hezbollah’s allies, as much as the US Magnitsky sanctions did in the past two years, but even those did not stop Hezbollah from moving forward with its take-over of Lebanon, its state institutions, and its resources. The only positive outcome is the repercussions from the US sanctions on Iran, which prohibited Hezbollah from accessing hard currency that used to come directly from Iran. Therefore, many of its programs were put on hold, and its support base shrunk. However, none of its main operations – military and financial – stopped.
Macron has probably realized this gradually over the past few months, after he announced his French Initiative in Beirut, during his visit after the Beirut Port explosion that destroyed half of Beirut and killed around two hundred people. He then met with everyone, including representatives and officials from Hezbollah. When asked about it he responded by saying that Hezbollah represents a big portion of the Lebanese people and cannot be excluded. However, this was mainly because the French still believed that Hezbollah could be part of the solution, not the problem.
But as things moved forward the formation of a rescue government and hit a brick wall, the French started to realize that Hezbollah not only part of the problem, but the main problem. Back in September 2020, Macron told Hezbollah that they will have to choose between staying a terrorist organization or become a Lebanese political party, represented in the parliament. Hezbollah has obviously decided to be both - act as a terrorist organization, without having to surrender its political status within state institutions. Eventually, without accountability, why would Hezbollah be pressured to choose?
Hezbollah is an Iranian organization – not Lebanese and certainly not bothered by any Lebanese-French dynamics. The only way to pressure Hezbollah is to double-down, not compromise. The French president understood this, and sanctions might come sooner or later; however, sanctions will no longer be enough to contain Hezbollah in Lebanon or Iran in the region. Without a clear policy – coordinated fully between the US and Europe – and aimed at containing Hezbollah, Lebanon will officially be an Iranian colony.
This is not impossible, as long as the nuclear talks between the US and Iran include – and in details – Iran’s regional operations, including Hezbollah in Lebanon. No sanctions relief should be offered without targeting this regional concern.
Hanin Ghaddar is the Friedmann Fellow at The Washington Institute’s Geduld Program on Arab Politics, where she focuses on Shia politics throughout the Levant.
