Libya burns cash, halts projects to battle budget crisis
(Reuters) - Libya is burning through central bank reserves and scrapping infrastructure projects to overcome its worst budget crisis in decades after the seizure of oil installations by armed groups has reduced the government's income almost to zero.
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In Benghazi, 22,000 soldiers were on the payroll but apparently not working, said political analyst Salah Elbakhoush. Islamist militants and other militias roam unchallenged, while car bombs and assassinations happen almost daily.
COSTLY SUBSIDIES
Libyans are also used to paying only two cents for a loaf of bread or $70 for a one-hour domestic flight, costly subsidies introduced by Gaddafi which the new rulers are afraid to cancel for fear of social unrest.
Central bank officials went on live television to stem rumours of state collapse by stating that Libya's foreign currency reserves would keep the country afloat.
http://www.reuters.com/article/2014/03/31/us-libya-budget-idUSBREA2U0TN20140331
