BEIRUT (Reuters) - Lebanon’s Hezbollah movement warned on Friday that a power vacuum could tip the country into civil war, suggesting that adversaries including the United States and Israel were seeking to exploit an unprecedented wave of demonstrations to provoke conflict.
Lebanon has been swept by more than a week of nationwide protests against a political elite accused of corruption, mismanagement of the state finances and leading the country towards an economic collapse unseen since the 1975-90 civil war.
A report from credit rating agency S&P was the latest to sound the alarm over the financial situation. Banks remain closed and have said they will only reopen when life returns to normal.
Hezbollah leader Sayyed Hassan Nasrallah, whose movement is part of Prime Minister Saad al-Hariri’s coalition government, urged his followers to stay away from the protests after they clashed with demonstrators in Beirut.
The heavily armed Shi’ite group is widely seen as the most powerful player in Lebanon and is part of an Iranian-led regional alliance that is in conflict with U.S.-allied Gulf Arab states that have political allies in the country.
Nasrallah praised the protest movement for forcing the government to agree a state budget without new taxes and “unprecedented” reforms including draft laws to lift banking secrecy, recover looted wealth and fight corruption.
But he also said the demonstrations that began spontaneously had been exploited by regional and international foes.
He reiterated Hezbollah’s rejection of the resignation of the Hariri government and any move to topple Hezbollah’s Christian ally, President Michel Aoun, saying this would leave a void.
“In view of the difficult financial, economic and living situation in the country, in view of security and political tensions that are prevailing in the region ... a vacuum will lead to chaos, to collapse,” Nasrallah said.
He said if Lebanon remained shut down by the protests, people including the army would not get their wages and the country would be plunged into complete chaos.
“I am afraid that there are those who want to take our country and generate social, security and political tensions and to take it to civil war,” Nasrallah said.
“God willing nothing like this will happen ... but I tell you there is information and doubts about this matter.”
The protests took a more violent turn on Friday when groups supporting Hezbollah pushed into a peaceful demonstration in Beirut, scuffling with protesters and forcing riot police to intervene.
Dressed in black t-shirts common to Hezbollah supporters, the men shouted “We heed your call, Nasrallah”.
Several protesters were injured in the scuffles, witnesses said.
After Nasrallah spoke, Hezbollah supporters waving the group’s yellow flag took to the streets of the southern suburbs of Beirut, the group’s stronghold.
“They’re trying to scare us with war. But they are the generation of war, we are an educated generation and know how to get along with one another,” said physiotherapist Bilal al Baba, 28, demonstrating in central Beirut.
Another protester, Maria, said Nasrallah’s speech encouraged her and her friends to come back out to protest. “The entire country was paralysed waiting for what he had to say,” she said.
Nasrallah urged protesters to accept Aoun’s invitation for dialogue. Aoun has suggested a cabinet reshuffle was on the table.
Credit rating agency Standard & Poor’s said the government’s limited ability to address the demonstrators’ demands could harm confidence in the banks and adversely effect foreign exchange reserves.
Lebanon’s banking association has held crisis meetings with the central bank governor and president in recent days in search of a way to reopen banks amid growing fears that a rush on them could deplete dwindling foreign currency deposits.
“Right now we’re using the pretext of the demonstrations not to open. We are afraid that when we open people will rush to withdraw their money or transfer it abroad,” said one senior banker.
He said banks were seeking a common policy to meet the needs of customers and the central bank governor has so far avoided capital controls that would likely stop expatriates from sending remittances.
As politicians ponder ways out, financial strains are mounting in Lebanon, one of the world’s most heavily indebted states.
Capital inflows needed to finance the state deficit and pay for imports have been slowing down, generating financial pressures not seen in decades, including the emergence of a black market for dollars.
While the central bank’s foreign currency reserves were enough to service government debt in the near term, risks to government creditworthiness have risen, S&P said.
Lebanon’s central bank governor and finance minister could not immediately be reached for comment on the S&P report.
There has so far been no financial support from countries which have in the past aided Lebanon, such as Western and Gulf Arab countries.
The European Union said it supports Hariri’s reforms and is committed to Lebanon and its stability.
“We are confident that the authorities will respond swiftly and wisely to legitimate aspirations of the Lebanese people,” the EU statement said.
Additional reporting by Samia Nakhoul, Laila Bassam and Lisa Barrington; Editing by Samia Nakhoul and Giles Elgood
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