Lebanon fails to break government deadlock as old tension lingers

The impasse is preventing the country from accessing financial aid to address the economic crisis

Lebanese Sunni leader Saad Al Hariri, talks to the media after being named Lebanon's prime minister-designate at the presidential palace in Baabda, Lebanon on October 22, 2020. Reuters

Five months after a massive explosion ripped through Lebanon's capital and brought down its government, the country remains without a fully functioning Cabinet. Without it, negotiations over much-needed international financial aid to help the tiny Mediterranean nation recover from its worst economic and financial crisis in decades, remain in limbo.

Caretaker Prime Minister Hassan Diab, whose Cabinet has been heavily criticised for failing to contain the crisis that unravelled a year ago, met separately on Tuesday with the country's top three officials in a bid to break the deadlock over forming a government.

But his efforts have so far failed to yield tangible results, sources familiar with the talks told The National, with President Michel Aoun and Prime Minister-designate Saad Hariri having yet to agree on a meeting to resume stalled negotiations.

Mr Aoun and Mr Hariri's relationship has recently suffered setbacks after a video emerged last week of the president accusing the prime minister-designate of “lying”, after he was asked by Mr Diab about progress in the Cabinet formation talks during a meeting at the presidential palace.

On Tuesday, Mr Diab said he believed the president and prime minister-designate will meet soon to resume negotiations but stopped short of announcing a date.

"I think there will be a meeting soon between President Aoun and Prime Minister Hariri at a date they find appropriate in order to follow up on the issue [forming a Cabinet] and reach a solution that gives birth to a government as soon as possible," Mr Diab said, following his meeting with Mr Aoun.

Carlos Ghosn's home at Ashrafieh St., in Beirut, Lebanon. Sunniva Rose for The National

Japanese journalists that were waiting outside, including when they were filming a car leaving Ghosn's house (unfortunately the driver did not look like him). Sunniva Rose for The National

BEIRUT, LEBANON - OCTOBER 17: People wave Lebanese flags and chant to mark the one-year anniversary of anti-government protests with a background of the destroyed silos on the seaport on October 17, 2020 in Beirut, Lebanon. On the one year anniversary since the unprecedented mass protests of Lebanese demanding political change as the country buckled under social and economic devastation, Beirut remains in rubble after the August 4 port blast. (Photo by Marwan Tahtah/Getty Images)

BEIRUT, LEBANON - JUNE 11: Protesters burn tires as large-scale protests resume on June 11, 2020 in Beirut, Lebanon. The Lebanese pound has lost 70% of its value since October when protests began. Although they abated during the coronavirus lockdown, the country's economic condition steadily worsened. (Photo by Diego Ibarra Sanchez/Getty Images)

BEIRUT, LEBANON - SEPTEMBER 04: Protesters hold torches and nooses, which have become symbols of public anger against the Lebanese government, as they commemorate a month since the city's deadly explosion on September 4, 2020 in Beirut, Lebanon. On August 4th, a fire at Beirut's port ignited a stockpile of ammonium nitrate causing a massive explosion that killed more than 200 people, destroyed surrounding neighborhoods and upended countless lives. (Photo by Marwan Tahtah/Getty Images)

BEIRUT, LEBANON - SEPTEMBER 10: Firefighters walk through a burned out warehouse as they respond to a huge blaze at Beirut port on September 10, 2020 in Beirut, Lebanon. The fire broke out in a structure in the city's heavily damaged port facility, the site of last month's explosion that killed more than 190 people. (Photo by Sam Tarling/Getty Images)

BEIRUT, LEBANON - AUGUST 08: Protesters throw stones during an anti-government demonstrations on August 8, 2020 in Beirut, Lebanon. The Lebanese capital is reeling from this week's massive explosion that killed at least 150 people, wounded thousands, and destroyed wide swaths of the city. Residents are demanding accountability for the blast, whose suspected cause was 2,700 tons of ammonium nitrate stored for years at the city's port. (Photo by Marwan Tahtah/Getty Images)

BEIRUT, LEBANON - SEPTEMBER 12: An anti-government protester gives water to a policeman after other protesters attacked his vehicle during a march toward the Presidential Palace, on September 12, 2020 in Baabda, Beirut, Lebanon. (Photo by Sam Tarling/Getty Images)

BEIRUT, LEBANON - SEPTEMBER 12: Anti-government protesters clash with security forces during a march toward the Presidential Palace, on September 12, 2020 in Baabda, Beirut, Lebanon. (Photo by Sam Tarling/Getty Images)

BEIRUT, LEBANON - JANUARY 22: Anti government protesters and riot police clash during a second day of violence, on January 22, 2020 in an upscale shopping district in Beirut, Lebanon. Weeks of bickering between the Hezbollah-allied political factions backing Lebanon's new Prime Minister Hassan Diab as to who gets which ministries has led protesters to decry his new government as partisan and political, and not the technocratic leadership they have been demanding since protests began on Oct 17th last year. (Photo by Sam Tarling/Getty Images)

BEIRUT, LEBANON - AUGUST 07: An aerial view of ruined structures near the city's port, the site of Tuesday's explosion, on August 7, 2020 in Beirut, Lebanon. By Friday, the official death toll from Tuesday's blast stood at 145, with thousands injured. Public anger swelled over the possibility that government negligence over the storage of tons of ammonium nitrate was behind the catastrophe. (Photo by Haytham Al Achkar/Getty Images)

BEIRUT, LEBANON - AUGUST 05: An aerial view of ruined structures at the port, damaged by an explosion a day earlier, on August 5, 2020 in Beirut, Lebanon. As of Wednesday, more than 100 people were confirmed dead, with thousands injured, when an explosion rocked the Lebanese capital. Officials said a waterfront warehouse storing explosive materials, reportedly 2,700 tons of ammonium nitrate, was the cause of the blast. (Photo by Haytham Al Achkar/Getty Images)

BEIRUT, LEBANON - FEBRUARY 11: Anti-government protesters are hit by a water cannon as they pull down a concrete barricade during a failed attempt to block politicians from accessing Parliament where they will vote whether to accept Lebanon's new government, on February 11, 2020 in Beirut, Lebanon. (Photo by Sam Tarling/Getty Images)

BEIRUT, LEBANON - AUGUST 5: Destroyed buildings are visible a day after a massive explosion occurred at the port on Aug. 5, 2020 in Beirut, Lebanon. As of Wednesday morning, more than 100 people were confirmed dead, with thousands injured, when an explosion rocked the Lebanese capital. Officials said a waterfront warehouse storing explosive materials, reportedly 2,700 tons of ammonium nitrate, was the cause of the blast. (Photo by Daniel Carde/Getty Images)

BEIRUT, LEBANON - SEPTEMBER 10: An aerial view of the black smoke following a fire that erupted in Beirut Ports Free Zone on September 10, 2020 in Beirut, Lebanon. The fire broke out in a structure in the city's heavily damaged port facility, the site of last month's explosion that killed more than 190 people. (Photo by Haytham Al Achkar/Getty Images)

BEIRUT, LEBANON - AUGUST 17: Family members mourn as the coffins of firefighters Charbel Hetti, Najeeb Hetti and Charbel Karem who were killed in the August 4th, Beirut port explosion are carried to the church during their funeral service in their hometown of Qartaba on August 17, 2020 in Beirut, Lebanon. Najeeb Hetti, 27 his cousin Charbel Hetti, 22 and his sisters husband Charbel Karam, 37 were killed during the Beirut port explosion along with 7 other firefighters from the Karatina fire department, who were the first responders to the blaze. The remains of Najeeb and Charbel were found on August 13th, however the family refused to bury them until the body of Charbel Karam was found, his remains were recovered on August 15th. There has been little visible support from government agencies to help residents clear debris and help the displaced, although scores of volunteers from around Lebanon have descended on the city to help clean. (Photo by Chris McGrath/Getty Images)

BEIRUT, LEBANON - AUGUST 07: A general view of buildings heavily damaged in Tuesday's explosion, on August 7, 2020 in Beirut, Lebanon. By Friday, the official death toll from Tuesday's blast stood at 145, with thousands injured. Public anger swelled over the possibility that government negligence over the storage of tons of ammonium nitrate was behind the catastrophe. (Photo by Haytham Al Achkar/Getty Images)

BEIRUT, LEBANON - OCTOBER 30: A demonstrator throws stones at police at an anti-France protest on October 30, 2020 in Beirut, Lebanon. Following a series of deadly attacks, France's President Macron declared a crackdown on Islamist extremism by shutting down mosques and other organisations accused of instigating violence. The comments sparked protests across the Muslim world and calls for a boycott of French goods. (Photo by Sam Tarling/Getty Images)

-- AFP PICTURES OF THE YEAR 2020 -- An injured man lies at the back of a car before being rushed away from the scene of a massive explosion at the port of Lebanon's capital Beirut on August 4, 2020. Two huge explosion rocked the Lebanese capital Beirut, wounding dozens of people, shaking buildings and sending huge plumes of smoke billowing into the sky. Lebanese media carried images of people trapped under rubble, some bloodied, after the massive explosions, the cause of which was not immediately known. - / AFP / Marwan TAHTAH

-- AFP PICTURES OF THE YEAR 2020 -- A helicopter puts out a fire at the scene of an explosion at the port of Lebanon's capital Beirut on August 4, 2020. AFP / STR

The formation of a Cabinet committed to implementing anti-corruption reforms and putting the country's finances in order has been at the core of demands by the international community in exchange for providing financial support to help Lebanon weather its crisis.

The crisis, which began to unravel in the last quarter of 2019 amid a liquidity crunch that eventually led banks to enforce unofficial capital controls, fuelled nationwide protests that forced Mr Hariri's resignation and paved the way for Mr Diab to take office.

For months following its formation, Mr Diab's government drew sharp criticism from Mr Hariri's Future Movement over its crisis management plans. But the relationship took a turn for the better after Mr Diab was charged late last year with negligence in connection with the deadly Beirut port blast that killed 200 people, injured thousands and destroyed large parts of the capital in August.

Mr Hariri called the indictment an “attack” on the post of premier, a position reserved for Sunni Muslims under Lebanon's power-sharing system.

“Throughout the past period, I have shown openness and willingness...so that we can form a government. My position is clear in this regard and I thank the [caretaker] prime minister for his efforts in this regard," Mr Hariri said following his meeting with Mr Diab.

Mr Hariri's relationship with Mr Aoun deteriorated after the prime minister-designate put forward a Cabinet lineup of 18 "non-partisan" experts that failed to secure the approval of the president. Mr Aoun contested Mr Hariri's allocation of key portfolios among political groups to be represented in the government.

Mr Aoun's son-in-law and leader of the largest parliamentary bloc, Gebran Bassil, later accused Mr Hariri of denying the president the right to nominate Christian ministers. Mr Bassil said Hariri however reached out to the country's other major political groups to discuss the Cabinet makeup, including the Iranian-backed armed group Hezbollah.

Mr Bassil, a staunch ally of Hezbollah, which the US classifies as a terrorist organisation, was the target of recent corruption-related sanctions against the backdrop of a wide-ranging US campaign to pile pressure on Iran and its regional allies.

Many hope the end of Donald Trump's tenure as US president, which was marked by relentless efforts to curb the wide influence that Iran enjoys across the region, including Lebanon where Hezbollah and its allies hold a parliamentary majority, will pave the way for a potential breakthrough.

UN Special Coordinator for Lebanon Jan Kubis, who was recently appointed as Special Envoy to Libya, asked in a twitter post on Tuesday if the new administration in Washington will "finally move parties to create a new government led by PM Saad Hariri?"

“A new government doesn't automatically mean the end of the crisis,” Mr Kubis, added, warning that “no government just contributes to deepening of the collapse and suffering of the people”.

Lebanon's deepening crisis has seen the national currency lose over 80 per cent of its market value against the dollar so far and is threatening to plunge over half of the population into poverty, barring any reforms to revive the economy and fight corruption, the World Bank cautioned.

Among the key reforms demanded by the international community is a stalled forensic audit of the Central Bank, whose operations have been long shrouded in secrecy.

Swiss authorities confirmed on Tuesday that they have requested mutual legal assistance from Lebanon in relation to a probe into “aggravated money laundering” tied to the central bank.