Lebanese Christian party offers idea to resolve dispute over new cabinet

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by arabnews.com -- reuters -- BEIRUT: A party founded by Lebanon’s Christian president made a proposal to end a dispute that has blocked the formation of a new cabinet and threatened a French drive to lift the country out of its worst crisis since the 1975-1990 civil war. The proposal, put forward on Saturday, involved handing major ministries to smaller sectarian groups in a country where power is shared between Muslims and Christians. There was no immediate comment from Shiite Muslim groups, which have insisted they choose who fills several posts. But a political source familiar with the thinking of dominant Shiite groups said the idea was unlikely to work.

Lebanon’s efforts to swiftly form a new government have run into the sand over how to pick ministers in a country where political loyalties mostly follow sectarian religious lines. A Sept. 15 deadline agreed with France to name a cabinet has passed. Paris, which is leading an international push to haul Lebanon back from economic collapse, has voiced exasperation and told Beirut to act “without delay.” The leader of the Free Patriotic Movement (FPM), the party founded by President Michel Aoun and allied to Hezbollah, proposed “undertaking an experiment to distribute the so-called sovereign ministries to smaller sects, specifically to the Druze, Alawites, Armenians and Christian minorities.” The statement was issued after Gebran Bassil, FPM head and son-in-law of the president, chaired a meeting of the party’s political leadership. Bassil is a Maronite, Lebanon’s largest Christian community.

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France's Macron Calls Lebanese Leaders over Cabinet Plans

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aawsat.com -- French President Emmanuel Macron called Lebanese leaders on Friday over stalled efforts to form a new government, a diplomatic source said, as Paris seeks to give a new push to its bid to pull the country out of a deep financial crisis. France has been leaning on Lebanon’s sectarian politicians to name a cabinet swiftly and embark on reforms to get the country out of the worst crisis since the 1975-1990 civil war. But the process hit a logjam because of a dispute over cabinet portfolios. Lebanon’s main Shiite factions, Iran-backed Hezbollah and the Amal Movement, say they must name Shiite ministers who should include the finance minister.

A Sept. 15 deadline agreed between Lebanese politicians and Paris for forming the new government has already been missed. President Michel Aoun received a phone call from Macron “dealing with the government situation and the necessity to continue efforts to secure the creation of the government as soon as possible,” the Lebanese presidency said. A diplomatic source said Macron had also called parliament Speaker Nabih Berri, the leader of Amal, and Saad Hariri, a former premier who has been backing Prime Minister-designate Mustapha Adib. Adib said on Thursday he would give more time for talks on forming the cabinet after reports indicated he might resign. He had proposed switching control of ministries, some of which have been held by the same factions for years.The diplomatic source said Macron had spoken to Adib on Thursday to tell him to keep calm and not step down. Opposition Lebanese Forces chief Samir Geagea, a fierce opponent of Hezbollah, said the party’s demands had struck at the core of the French initiative. “God willing I am wrong, but it has really broken down, what can save it now?” Geagea said in a televised news conference. He said that giving into the demands of Hezbollah and Amal would lead other factions making demands, obstructing reform. Asked what would happen if the opportunity presented by the French push was lost, he said: “More collapse, but faster.”

France says Lebanese depositors may not get all their cash, minutes show

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FILE PHOTO: Salim Sfeir, chairman of the Association of Banks in Lebanon and chief executive of Bank of Beirut, is pictured during an interview with Reuters in Beirut, Lebanon July 22, 2019. REUTERS/Mohamed Azakir BEIRUT (Reuters) -

by reuters -- A French official has said it might be difficult for Lebanon’s banks to prevent savers losing some of their deposits, according to the minutes of a meeting in which France outlined steps to help the crippled banking industry. The comments were made during Sept. 10 talks in Paris between senior French officials and a delegation from the Association of Banks in Lebanon (ABL). Reuters reviewed a copy of the minutes, marked confidential. France has taken the lead in international efforts to push Lebanon’s fractious politicians to implement reforms needed to attract aid and ease a crisis that has paralysed the banking sector, shutting depositors out of most of their funds. “While it is a matter of principle for the ABL that depositors should bear no losses, it may be difficult to defend this to the end. But this is a matter of negotiation,” Pierre Duquesne, President Emmanuel Macron’s envoy to coordinate international support for Lebanon, said, according to the minutes.

Lebanon’s central bank and commercial bankers have sought to prevent a “haircut”, or formal reduction in balances held on deposit accounts. But savers with U.S. dollar accounts in Lebanon say they have already lost money as they cannot access funds or can only do so by exchanging into Lebanese pounds below market rates. The Lebanese pound, which was pegged to the dollar for more than two decades, has crashed during the financial crisis. The French Foreign Ministry had no immediate comment.

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US sanctions Lebanon companies for funnelling millions to Hezbollah

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by thenational.ae -- Joyce Karam -- The US announced sanctions on Lebanon-based Arch Consulting and Meamar Construction on Thursday, a week after it backlisted two former ministers accused of enabling Hezbollah. The US said it sanctioned the two companies for being owned, controlled, or directed by Hezbollah. It also added Hezbollah Executive Council official Sultan Khalifah Asaad, who it said was tied to both companies, to its OFAC list of sanctioned individuals. “Through Hezbollah’s exploitation of the Lebanese economy and manipulation of corrupt Lebanese officials, companies associated with the terrorist organisation are awarded government contracts,” said Secretary of the Treasury Steven Mnuchin. “The United States remains committed to targeting Hezbollah and its supporters as they corruptly abuse Lebanese resources to enrich their leaders while the Lebanese people suffer from inadequate services.”

The US Treasury said that both companies funnelled money to the leadership of Hezbollah from government and private contracts with the assistance of former Lebanese transport minister Youssef Fenianos and former finance minister Ali Hassan Khalil – two officials hit with sanctions on September 8. Seperatly on Thursday, the US sanctioned two Iranian entities and 45 associated individuals who carried out a malware campaign targeting Iranian dissidents, journalists and international travel companies. The sanctions on entities tied to Hezbollah financing came as the Iran-backed political-party-cum-militia said it was standing firm on its insistence to name ministers to the new government despite attempts to form a technical administration free of political appointees. Hezbollah said on Thursday that it would be naming a Shiite as the next finance minister, despite the issue stalling the formation of the new government and attempts by French President Emmanuel Macron to broker a new political initiative to pass reforms needed to drag the country out of the worst economic crisis in decades and rebuild the shattered capital after a massive explosion on August 4.

Prime Minister-designate Mustapha Adib met with President Michel Aoun on Thursday to discuss the stalled formation of government. He said afterwards that they agreed to allow more time to form a new administration. Firas Maksad, a Professor at George Washington University, saw the sanctions as part of Washington’s strategy to attempt to isolate Hezbollah and limit Iran’s leverage in Beirut. “The US administration is utilising targeted sanctions as a cost-free tool against Iranian influence in Beirut. At a minimum, this strategy could help distance Hezbollah from some of its allies. Whether it can succeed in encouraging the formation of a more neutral technocratic government remains to be seen,” Mr Maksad told The National. “In Beirut, the French initiative to form a neutral technocratic government is on its last leg. Another indication that Iran and Hezbollah are unwilling to cede any influence ahead of the US elections, risking a catastrophic financial crisis for Lebanon in the process.”

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Is Lebanon a Failed State? Here’s What the Numbers Say.

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by cfr.org -- The government’s inefficacy is tied to the sectarian political order enshrined in a 1943 agreement. To reflect the major religious groups among the population of nearly seven million, a Sunni Muslim serves as prime minister, a Maronite Christian as president, and a Shiite Muslim as the speaker of parliament. But by concentrating power among certain families and former warlords­—including the leaders of Hezbollah, the Future Movement, and the Free Patriotic Movement, which are primarily affiliated with Shiites, Sunnis, and Christians, respectively—the system promotes cronyism and parochial interests over vital reforms. As part of a protest movement spurred by a proposed tax on the use of the popular messaging service WhatsApp in October 2019, Lebanese have demanded the ruling elite cede power to a technocratic government.

Catalysts for the public’s anger include the failing economy and lack of public services. The Lebanese pound is pegged to the U.S. dollar, but when the central bank tried to maintain an exchange rate of 1,500 pounds to the dollar amid increased demand for the U.S. currency last year, the ensuing dollar shortage left many people unable to access their savings. More recently, the Beirut blasts sparked fears of food insecurity because the damaged port housed silos containing 85 percent of Lebanon’s cereals, leaving the country with less than a month’s worth of grain reserves. The port also received most of Lebanon’s fuel imports, a vital resource for a country that hasn’t had a complete electrical grid since its 1975–1990 civil war. The country’s waste management systems also suffer from poor infrastructure. Whether Lebanon can avoid becoming a failed state is unclear. The government resigned after the Beirut explosions, and the country will have to install a new cabinet and institute certain reforms to receive much-needed foreign aid. But while the reforms would address major issues including electricity and corruption, the country’s flawed political system would remain intact.

Lebanon Misses Government Formation Deadline, French President Macron 'disappointed

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by Written By Shubham Bose - republicworld.com -- French President Emmanuel Macron said he regrets the failure of Lebanese lawmakers at forming a new government as per the 15-day deadline agreed upon by both countries. The statement was released by his office on Wednesday, September 16. According to reports, the deadline was set as a part of Macron's initiative in Lebanon following the events of the Beirut blast and the French President has been pressing the Lebanese lawmakers to select experts to the 'Crisis Cabinet' who could guide the country out of its current political and economic turmoil.

'Not too late' to form government: Macron

As per reports, despite missing the deadline, Macron has expressed that it is not too late for Lebanon to form a crisis cabinet. However, opposing political parties in Lebanon are unable to reach a consensus regarding the appointment of key portfolios such as the Finance Ministry. According to reports, the French President in his statement said, “It is not yet too late: everyone must assume their responsibilities and finally act in the sole interest of Lebanon by allowing Moustapha Adib to form a government that reflects the seriousness of the situation.” Moustapha Adib is the current Prime Minister-designate of Lebanon who took the top chair following the resignation of the elected Lebanese government in the wake of public anger.

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