Lebanon’s PM designate Hariri steps down, plunging country into deeper crisis

France’s foreign minister calls the failure to form a Lebanese government a ‘terrible incident’

Saad al-Hariri (REUTERS)

Lebanon‘s prime minister-designate Saad Hariri has stepped down just nine months after taking the post, blaming “key differences” with the Lebanese president in a move that plunges the troubled country into further chaos.

Lebanon is already in the grips of an unprecedented economic collapse, described by the World Bank as one of the worst in the world in a century and a half. The crisis has only been worsened by the fact the Mediterranean state has had no proper leadership in nearly a year.

After months of stalemate, Mr Hariri finally presented a 24-person cabinet to President Michel Aoun on Wednesday igniting hopes a government could finally be formed potentially unlocking millions of dollars of much needed international aid.

But after a 20-minute meeting with Mr Aoun on Thursday, Mr Hariri said the president had requested fundamental changes to a cabinet line-up he had presented.

“It is clear that we will not be able to agree with the president,” he said. “I excused myself from forming the government. God help the country,” he added before walking away.

French Foreign Minister Jean-Yves Le Drian called the failure to form a Lebanese government a “terrible incident”.

Speaking from New York he said that after the president rejected Hariri’s line up “it is only logical that the prime minister draws his conclusions.”

“It is yet another terrible incident... There is a total inability of the Lebanese leaders to find a solution to the crisis that they have created,” he added.

There was no immediate comment from the presidency.

Later Mr Hariri clarified to Lebanese TV network al-Jadeed that he would have pushed ahead with forming the cabinet but he was sure President Michel Aoun still wanted a blocking minority and his Free Patriotic Movement party would not give the cabinet confidence.

With no obvious alternative for the post, which must be filled by a Sunni Muslim in Lebanon’s sectarian system, there is little hope of a government that can start fixing the economic crisis which is grounded in decades of corruption and mismanagement.

Economists warned that Thursday’s announcement could see further hyperinflation, crushing poverty, hunger and also sectarian tensions that together were “the ingredients of a social explosion and civil war”.

The Lebanese lira briefly plunged from 19,300 to the dollar on Wednesday to 22,000 to the dollar on the black market after the news broke. It is still officially pegged at 1,500. Protesters and supporters of Mr Hariri took to the street blocking roads in Beirut, Bekaa and Saida.

In total the currency has lost nearly 95 percent of its value since the start of last year, seeing food prices more than quadruple. It has meant that, according to the UN, over three-quarters of the country do not have food or access to money to buy food.

One of the only ways out of the crisis was the hope of an International Monetary Fund loan and international aid, which are both tied to the formation of a new government and new reforms.

Thursday is the second time that Mr Hariri, 51, has resigned from the premiership. He last stepped down as prime minister in October 2019 in a bow to nationwide protests which had demanded major reforms and condemned the entire political class. A year later, after a massive explosion at Beirut port blew up swathes of the city killing over 200 people, the government which followed his, also resigned.

Mr Hariri was subsequently re-named to the post of premier-designate by parliament. But nine months on, the country’s deeply fractured political elite have failed to agree on the makeup of a new cabinet, despite the pressing need to break the deadlock as the economy continues to spiral.

Instead, a power struggle emerged between Mr Hariri on one side and Mr Aoun and his son-in-law, Gebran Bassil, who heads the largest bloc in parliament, on the other, over who has more power to build the next cabinet, which would oversee critical reforms and elections.

The two sides have since been trading blame over who was responsible for the deadlock. Regional and international mediation has failed to bridge the differences between the two sides.

The EU has even threatened sanctions against those blocking efforts to form a government which, according to a diplomatic note seen by Reuters, could include travel bans and asset freezes.

Meanwhile, living conditions continue to decline: now most households in the country also only have an hour or two of power from the national grid each day because of crippling fuel shortages, as the country lacks foreign currency to import.

These are the ingredients of a social explosion and civil war

Sami Nader, Lebanese economist

“We are in a freefall. The only way out of the crisis was international [financial] support. That isn’t possible without forming a government without an economic plan,” said Sami Nader, a Lebanese economist and director of the Levant Institute for Strategic Affairs.

“We are not even back at square one, we are at square minus five.” He said that the government was instead ploughing through the last of its foreign reserves.

“We are effectively burning the wood beams of the house to have heat,” he added. “God knows where we are heading to. There is no limit to how low the lira can plunge, you can’t do any computation.”