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Libya: Government is on the verge of bankruptcy—source - ASHARQ AL-AWSAT English Archive
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Libyan Prime Minister Ali Zeidan speaks during a press conference on January 22, 2014 in the capital, Tripoli. (AFP PHOTO/MAHMUD TURKIA)

Libyan Prime Minister Ali Zeidan speaks during a press conference on January 22, 2014 in the capital, Tripoli. (AFP PHOTO/MAHMUD TURKIA)

Cairo, Asharq Al-Awsat—The Libyan interim government could face bankruptcy as public revenues continue to shrink as the suspension of oil production and exports continues, according to a source in the Ministry of Finance.

The Ministry of Finance official, who spoke to Asharq Al-Awsat on the condition of anonymity because he was not authorized to speak to the press, said General National Congress (GNC) President Nouri Abusahmain had met with the governor of the Central Bank of Libya (CBL) and the finance and planning ministers to discuss the shortage in revenues caused by the sharp fall of the country’s oil production.

Libya’s oil and gas production has been crippled since last July by multiple strikes and blockades by groups dissatisfied with the post-Gaddafi government’s progress on issues including employment, poverty and tribal and ethnic minority rights.

The Finance Ministry source said the government is having difficulty paying salaries across all its departments, suggesting that the “government may declare bankruptcy by May if the current situation continues.”

Meanwhile, the political situation in the Mediterranean country continued to deteriorate on Tuesday as the Justice and Construction Party, the second-largest party in the GNC, threatened to quit the interim government.

Having failed to mobilize public support to remove Prime Minster Ali Zeidan, the party, which is the Libyan Muslim Brotherhood’s political arm, said it would withdraw its five ministers from the interim executive.

The Islamist party secured only 99 votes of the 120 needed to withdraw confidence from Zeidan.

Zeidan has come under fire over his failure in tackling the security file in the country, which has been plunged into chaos with warring militias locked in fierce clashes.

“Zeidan failed in his duty to provide security, and to deliver in the electricity and oil sectors,” Justce and Construction Party member Nizar Kawan said in a statement. “We had asked for a withdrawal of confidence, but some don’t understand the danger of the stage we are at now.”

Speaking to Asharq Al-Awsat on the condition of anonymity, a source close to Zeidan said: “The Prime Minister’s office has not received any written resignation from the five Justice and Construction Party ministers.”

The source added that Zeidan seems to be determined to replace the Justice and Construction Party ministers with non-Islamist ones.