Three months after Lebanese President Michel Aoun asked the country’s Prime Minister Saad Al-Hariri to form a new government, there is still no sign that the vacuum will soon be filled, with observers in two minds about the procrastination in the light of the amicable relations between the two men.

Aoun has had good relations with Al-Hariri since his rise to power, and these increased with the legislative elections that saw a historic rapprochement between arch-enemies the Future Movement and the Free Patriotic Movement in Lebanon.

The current government vacuum constitutes an obstacle to Lebanon’s receiving the billions of dollars in loans and grants that the international community has pledged to save the country’s fragile economy.

Fears are mounting that the political paralysis will negatively affect the value of the Lebanese pound.

Delaying the formation of governments in Lebanon has become something akin to standard protocol. No government can be formed in the country without the agreement of its major political forces, and Lebanon’s political system is based on dividing positions among the country’s various factions.

In 2009, it took Al-Hariri five months to form a new government. Former prime minister Tammam Salam needed 10 months in 2013 and 2014 to announce the formation of his cabinet.

What is different this time around is that the political groups seem more in harmony with each other in the light of the settlement between the Christian groups of Aoun, the Free Patriotic Movement and Samir Geagea, head of the Lebanese Forces.

Contributing to the mood of concord is the alliance between former rivals Aoun and Al-Hariri, which has also reflected positively on the tension between the latter and the Shia group Hizbullah.

However, Lebanese politicians are still bickering over the details of any new government, and tensions have arisen between Geagea and Gebran Bassil, head of the Free Patriotic Movement and Aoun’s son-in-law, despite the agreement signed between the two forces.

The positive relationship between Al-Hariri and Aoun has not succeeded in preventing problems between the two men’s movements.

One major hurdle is the division of Lebanon’s political groups over the country’s relationship with Damascus, amid attempts to accelerate the return of 1.5 million Syrian refugees that have increased the burdens on an already weak Lebanese economy.

But the main problem remains the traditional contention over each group’s share in the government and the allocation of ministries.

However, Al-Hariri has stated that “the problems facing the formation of the new government have been solved,” adding that he had obtained 112 votes from Lebanese MPs to form a national unity government.

“We have agreed that all the parties should take part in the government so that we can all share in responsibility for the country,” he added.

Aoun said that hurdles to forming a new government still remained, because some political forces were demanding more shares in the ministries.

The new government should reflect the results of the legislative elections, he said, commenting that “parliamentary elections were held according to the party-list system to allow the representation of majority and minority groups. Some factions didn’t like the system because it made them lose power and showed the real size of each group. Those who lost have not been able to accept these facts.”

He said that a demand by the Lebanese Forces to claim five ministries in the new government was unacceptable and criticised the insistence of the Progressive Socialist Party to exclude the Druze from the government.

Another point of contention has been the president’s share in appointing ministers, customary during the presidencies of Michel Suleiman and Emile Lahoud, both of whom were military leaders.

Aoun is demanding an extension of the custom in addition to the share of portfolios given to his Free Patriotic Movement, the majority group in parliament headed by Bassil, who is his son-in-law.

Opponents have reminded Aoun of the situation in 2011 when Aoun, then head of the Change and Reform bloc, questioned why the president should have a say over the formation of the government.

In reply, Ahmed Fetfet of the Future Movement who had attended the National Dialogue Conference held in Qatar that gave rise to the 2008 Doha Agreement on the future of Lebanon, said that the agreement had given the president a ministerial share because he was not represented in parliament.

Aoun’s opponents say that if the president receives a say in the government, this will encourage others to increase their demands. This has long been a problem in Lebanon, where politicians will threaten chaos to force through their demands.

Aoun will not backtrack on the pledges he made with politicians who want a continuation of the status quo and have no desire for change.

Al-Hariri is also content without a government that could embarrass him on topics such as the relationship with Damascus, coordination on the Syrian refugees and the rebuilding of war-ravaged Syria.

However, he does not want to cut ties with Aoun and the Free Patriotic Movement, Druze ex-parliamentarian Walid Jumblatt, the Lebanese Forces or other political factions.

These do not seem to be in a hurry to see a new cabinet as they know they will be in the new government with the same or similar representation.

Lebanon’s political alliances may see changes, though, as the delay has given room for tensions to rise between Aoun and Al-Hariri and the latter and the Free Patriotic Movement.

Contention between the Free Patriotic Movement and the Progressive Socialist Party is threatening a schism. The Lebanese Forces are maintaining communication with the Free Patriotic Movement, but they have also strengthened ties with the Future Movement and the Progressive Socialist Party.

In the meantime, the biggest loser has been the Lebanese economy, with the real-estate sector seeing a 20.1 per cent decline and fears that the Lebanese pound will depreciate further against the dollar. In order to counter these, Lebanon’s banks have now increased interest rates to 15 per cent.

Al-Hariri has warned that the economic crisis will impede chances to implement major investment projects after the international community pledged more than $11 billion in April to support Lebanon’s economy.

Most donor countries and organisations have linked the funds to reforms in Lebanon, impossible in the absence of a government, which they hope will raise the growth rate in Lebanon from one per cent over the past three years to the 9.1 per cent it saw before the conflict in Syria.

Lebanese public debt has reached $82.5 billion, or 150 per cent of GDP. The World Bank, which has pledged Lebanon more than $4 billion, has warned of the critical condition of Lebanon’s economy.

Despite the negative economic indicators, Lebanese officials say the country could still receive the pledges made in April, with Pierre Duquesne, a representative of the aid conference for Lebanon, scheduled to meet with officials in the coming days to lay out follow-up mechanisms.

Riad Salamé, governor of the Central Bank of Lebanon, has stressed that the Lebanese pound is stable and that the Central Bank has the means to protect the currency.

“The foreign reserves exceed $44 billion, a $2 billion increase on 2017, and deposits are expected to increase in the banks,” Salamé said.

The Central Bank said it was not worried about the pound, whose exchange rates have been fixed since 1997. “We are looking forward to further financial stability, and reforms to decrease the budget deficit will help us realise this stability,” Salamé said.

He denied claims a financial crisis was impending, adding that the rumours aimed to “create a state of fear and undermine confidence.”

The private-sector banks were offering high interest rates to encourage people to deposit their money in Lebanese pounds, he added, and the country’s balance of payments was performing positively.

* A version of this article appears in print in the 6 September 2018 edition of Al-Ahram Weekly under the headline: Lebanon on the edge