December 11, 2018 / 11:17 AM / a month ago

Aoun intervenes to help form Lebanon government, avoid 'catastrophe'

BEIRUT (Reuters) - Lebanese President Michel Aoun said on Tuesday he was intervening in stalled efforts to form a new national unity government, warning the country faced “catastrophe” if this failed.

FILE PHOTO: Lebanese President Michel Aoun talks on the eve of the country's 75th independence day at the presidential palace in Baabda, Lebanon November 21, 2018. REUTERS/Dalati Nohra/Handout via REUTERS

More than six months since an election, efforts to form the new cabinet led by Prime Minister-designate Saad al-Hariri are still logjammed with rival groups vying for cabinet posts.

Aoun said the challenges in the government formation could not be resolved “the traditional way” between the prime minister-designate and the other parties, and it was his duty to get involved.

“The risks are greater than we can bear,” he said, in an apparent reference to difficulties facing the heavily indebted Lebanese economy.

“We are launching an initiative ... and it has to succeed, because if it doesn’t ... there is a catastrophe, we want to say it with all frankness, and this is the reason for my intervention,” Aoun said in a televised news conference.

Aoun held separate meetings with Hariri and Parliament Speaker Nabih Berri on Monday.

Agreement over the make-up of the new cabinet has met a series of obstacles as Hariri has sought to forge a deal parceling out 30 cabinet posts among rival groups according to a sectarian political system.

The final hurdle has been over Sunni representation, with the powerful Iran-backed Shi’ite group Hezbollah demanding a cabinet seat for one of its Sunni allies who gained ground in the election.

Hariri, a Western-backed leader whose family have long dominated Lebanese Sunni politics, has ruled out giving them one of his seats.

Lebanon is in dire need of a government able to implement the economic reforms the IMF says are needed to put its public debt on a sustainable path. Lebanon has the world’s third largest public debt as a proportion of the economy, and growth is stagnant.

The real estate sector, once a leading driver of Lebanese economic growth, is particularly suffering from the lack of a government, said developer Solidere on Monday.

“It’s definitely putting a lot of stress on the real estate market because people need to feel stability. You need to have a government, you need to have sometimes legislation... real estate is hurting,” said Oussama Kabbani, chief operating officer for Solidere International.

Analysts believe one compromise could be for Aoun to nominate one of the Hezbollah-aligned Sunnis, or a figure acceptable to them, among a group of ministers named by the president.

Additional reporting by Tom Arnold in Dubai, Writing by Tom Perry, Editing by Matthew Mpoke Bigg, William Maclean

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