- The attention of politicians is on the elections next year
- “No plan B has yet been agreed,” said a source close to the presidency
- “Slow death” if we just wait for the vote – opposition figure
BEIRUT, July 16 (Reuters) – France on Friday urged Lebanon to appoint a prime minister as soon as possible after Saad al-Hariri abandoned his efforts to form a government, but the prospects for a new government soon looked grim after months of political conflict.
Lebanon appears poised to sink further into economic collapse, with many of its sectarian politicians focusing on next year’s elections rather than a new government or financial bailout, seemingly unresponsive to the threats of Western sanctions.
The collapse of the Lebanese currency has reached new lows following Hariri’s decision. The dollars changed hands at a rate of over 22,500 pounds on Friday, wiping out more than 90% of the pound’s value in less than two years.
The financial crisis, considered by the World Bank to be one of the deepest depressions in modern history, has plunged more than half of the population into poverty and resulted in worsening shortages of basic commodities such as fuel and drugs.
France, which has led international efforts to deal with the crisis, said the blockade was “deliberately imposed” and announced a new international conference on August 4 – the first anniversary of the devastating explosion in the port of Beirut. – to meet the needs of the Lebanese population. .
Announcing his decision to step down on Thursday, Hariri said it was clear that he and President Michel Aoun could not get along.
He did not speak of falling out over strategies to save the economy, but said the argument boiled down to Aoun’s insistence on maintaining a blocking minority in the cabinet.
Their struggle is tinged with sectarianism, pitting Hariri, Lebanon’s main Sunni Muslim politician, against the Christian Maronite head of state who is backed by the Lebanese Shiite Muslim group Hezbollah backed by Iran.
Hariri said Thursday that Hezbollah had not done enough to get Aoun to compromise. In a message to his subscribers, he said: “we will respond at the ballot box”.
Aoun said on Thursday he would hold binding consultations with MPs to appoint a new prime minister as soon as possible. The post is to be occupied by a Sunni under the sectarian regime in Lebanon.
But Hariri has said he won’t appoint anyone, and political sources and analysts say it would be very difficult to find a Sunni politician willing to take the job without his blessing.
“Now we are facing a new challenge which will not be easy as there is no agreed plan B yet,” said a source close to the presidency.
‘A SLOW DEATH’
Prime Minister Hassan Diab, whose cabinet resigned after the explosion in the port of Beirut which devastated entire swathes of the capital, remains on an interim basis.
Legislative elections are due to take place next spring. Hezbollah and its political allies won a majority last time.
“To wait another eight months for the legislative elections is to wait for a slow death, and there is no guarantee that in eight months this election will be made possible,” said Ghasan Hasbani, a former deputy prime minister who belongs to the Forces party. Lebanese, a Christian group that opposes Aoun and Hezbollah and wants early elections.
“Everything we see now is just going to multiply at an exponential rate,” he said, referring to the currency and health services collapse, power cuts and shortages.
Lebanon’s central bank has used up its foreign exchange reserves to fund a subsidy program to import basic commodities such as food, fuel and medicine at a cost of around $ 6 billion a year.
Lebanon could reach $ 900 million by August if the $ 650 billion expansion proposed by the International Monetary Fund for its emergency reserves, or Special Drawing Rights, is passed.
Politicians believe the funds will provide a bit of a breather before the election, political sources say.
Mike Azar, a Beirut-based financial adviser, said that even if a government was formed it had to be able to carry out meaningful reforms or else the paralysis would continue.
“The pound will continue to devalue and this will happen at an accelerating rate, there will be more product shortages as you run out of dollars to import goods and the products here will be unaffordable for most people,” said Azar.
“We are in a very thin period.”
Report by Maha El Dahan and Tom Perry in Beirut and Benoit Van Overstraeten in Paris Editing by Mark Heinrich
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