Talks among Lebanon’s political parties to agree on a new government are still deadlocked, three senior sources said on Sunday, as Hezbollah indicated it would not be forced into concessions.
The latest failure to break Lebanon's political impasse will worsen pressures on an economy gripped by a deep crisis.
Since reopening a week ago, commercial banks have been seeking to stave off capital flight by blocking most transfers abroad and imposing curbs on hard-currency withdrawals, though the central bank has announced no formal capital controls.
A big part of Lebanon's economic crisis stems from a slowdown of capital inflows which has led to a scarcity of US dollars and spawned a black market where the Lebanese pound has weakened below its official pegged rate.
A meeting on Saturday evening between caretaker Prime Minister Saad Hariri and senior officials from Hezbollah and its ally Amal movement failed to yield any breakthrough towards forming the new cabinet, the sources said.
"The crisis is deepening," one source familiar with Hariri's position said. A senior source familiar with the view of Hezbollah and Amal said: "Nothing has changed. So far the road is completely blocked." A third senior source said the situation was still deadlocked.
Hariri resigned on Oct. 29 in the face of unprecedented protests fuelled by poverty, joblessness and lack of basic services like electricity.
Hariri wants to lead a technocratic government devoid of other politicians, while Amal, Hezbollah and the Free Patriotic Movement, which has been founded by President Michel Aoun and is now led by his son-in-law caretaker Foreign Minister Jebran Bassil, want a government mixing technocrats and politicians.
The source familiar with Hariri's views has said he believes a cabinet composed of both technocrats and politicians would not be able to secure Western assistance and would also anger protesters who want to see a change of leadership.
Hariri reiterated his position in the meeting with caretaker Finance Minister Ali Hassan Khalil of Amal and top Hezbollah official Hussein Khalil, the senior source familiar with Hezbollah and Amal's view said.
Both Hezbollah and Amal communicated their view – that Hariri should return as premier of a new 'technopolitical' cabinet -- at the meeting. Hariri said he would only agree to head a technocratic cabinet.
"Practically, what he wants is a government devoid of Hezbollah," the senior source said. "After 10 days have passed, matters must be decided."
The source familiar with Hariri's position said he believed Hezbollah, Amal and the FPM were seeking the inclusion in the cabinet of politicians rejected by the protesters. These include Bassil.
"If these faces return to government we will have pushed the street to return to protest in a greater way," the source familiar with Hariri's position said.
In a statement apparently referring to the deadlock and to Hezbollah's loss of fighters in various conflicts, the head of Hezbollah’s parliamentary bloc, Mohammad Raad, said: "Our arms will not be twisted nor can we be neutralized from achieving the goals of the martyrs."