HARIRI RESIGNS AFTER CABINET BID FAILS

▶ Lebanese pound sinks to record low as political deadlock continues

Saad Hariri has stepped down as Lebanon’s prime ministerdesignate after his last-ditch effort to form a government failed amid disagreements with President Michel Aoun over the make-up of the Cabinet.

On Thursday, Mr Hariri said he was resigning after Mr Aoun dismissed his latest proposal to form a Cabinet of 24 nonpartisan experts.

“It is clear that we will not be able to agree with the president,” he said.

As he left the presidential palace following a brief meeting with Mr Aoun, Mr Hariri said: “God help Lebanon.”

His withdrawal opens the door for the parliamentary majority, currently held by Mr Aoun, Iran-backed Hezbollah and their allies, to nominate a new prime minister, unless there is broad agreement on a successor.

No agreement has yet been reached, Mustapha Allouch, a member of Mr Hariri’s Future Movement and a former MP, told The National.

“It all depends on discussions in coming days,” Mr Allouch said.

The Future Movement is still keen to play a part in the formation of a new Cabinet despite Mr Hariri’s decision to step down, he said.

The president’s office said Mr Aoun would schedule binding parliamentary consultations to nominate a new prime minister “as soon as possible” and described Mr Hariri’s latest proposal as an attempt to justify his pre-arranged withdrawal.

Mr Hariri said nine months of negotiations hit a dead end when Mr Aoun requested fundamental changes to his latest Cabinet proposal.

But Mr Aoun said Mr Hariri refused to discuss amendments to a line-up he dictated without consulting the country’s major political parties.

Mr Hariri had accused the president of blocking the formation of a Cabinet in which the Free Patriotic Movement lacks veto power.

The party was founded by Mr Aoun and is led by his son-inlaw, Gebran Bassil.

Mr Aoun has denied the accusations, saying that Mr Hariri sought to dictate the make-up of the Cabinet in breach of the constitution.

The political paralysis has compounded one of the worst economic crises to hit the country.

Shortly after Mr Hariri announced his resignation, the Lebanese pound sank to a record low of 20,500 against the US dollar, sparking protests across the country against deteriorating living conditions.

The EU has threatened to impose sanctions on Lebanese politicians for blocking the formation of a Cabinet that would undertake reforms in exchange for international financial aid.

The crisis could soon worsen, financial experts say.

“Without a solid government action plan to urgently enact reforms and engage the International Monetary Fund, Lebanon’s economic and financial woes will deepen,” said Saeb El Zein, an emerging markets specialist and former managing director of several investment funds.

“That would translate into more shortages in vital commodities, a further deterioration in the pound exchange rate and an increase in the number of people living [below] the poverty line. Lebanon risks plunging into social unrest if the deadlock persists.”