The Main Challenges Facing Lebanon's New Government

In this photo released by Lebanese government, Lebanese President Michel Aoun, left, meets with Prime Minister Najib Mikat, at the presidential palace, in Baabda, east of Beirut, Lebanon, Friday, Sept 10, 2021. (Dalati Nohra/Lebanese Official Government via AP)
In this photo released by Lebanese government, Lebanese President Michel Aoun, left, meets with Prime Minister Najib Mikat, at the presidential palace, in Baabda, east of Beirut, Lebanon, Friday, Sept 10, 2021. (Dalati Nohra/Lebanese Official Government via AP)
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The Main Challenges Facing Lebanon's New Government

In this photo released by Lebanese government, Lebanese President Michel Aoun, left, meets with Prime Minister Najib Mikat, at the presidential palace, in Baabda, east of Beirut, Lebanon, Friday, Sept 10, 2021. (Dalati Nohra/Lebanese Official Government via AP)
In this photo released by Lebanese government, Lebanese President Michel Aoun, left, meets with Prime Minister Najib Mikat, at the presidential palace, in Baabda, east of Beirut, Lebanon, Friday, Sept 10, 2021. (Dalati Nohra/Lebanese Official Government via AP)

Lebanon's new government, finally formed in the throes of an accelerating economic meltdown after 13 months of political deadlock, has its work cut out.

What are the most pressing issues for the cabinet announced on Friday, and how easy will they be to tackle?

What are the priorities?
Prime Minister Najib Mikati's 24-member cabinet desperately needs to lift Lebanon out of what the World Bank has called one of the planet's worst economic crises since the 1850s.

The Lebanese pound has lost more than 90 percent of its value to the dollar on the black market, inflation has soared and people's savings are trapped in banks.

With foreign currency reserves plummeting, the cash-strapped state has been struggling to maintain subsidies on basic goods.

Petrol and medicine have become scarce, the state barely provides two hours of electricity supply a day, and almost 80 percent of the population now lives in poverty.

"The first priority for the government really will be to stem the collapse," said Maha Yahya, director of the Carnegie Middle East Center.

Subsidies needed to be lifted and a safety net put in place to ease the blow on the most vulnerable, she said.

To do this, analysts have said, the cabinet will need to relaunch talks with the International Monetary Fund to unlock billions of dollars in financial aid.

After defaulting on its debt in March 2020 for the first time in history, Lebanon started talks with the IMF, but these quickly hit a wall amid bickering over who should bear the brunt of the losses.

Will this be easy?
The international community has demanded sweeping reforms and a forensic audit of the country's central bank before any financial assistance is disbursed.

The previous government in 2020 announced a rescue roadmap that included electricity sector reform, restructuring the banking sector and lifting the official dollar peg.

But it has yet to be implemented.

As for the central bank audit, it too has stalled, with the central bank claiming it could not provide the auditing firm with some of the required documents because of banking secrecy.

Economist Mike Azar said that reforming the oversized commercial banking sector and central bank, as well as restructuring the public sector, would be key for any deal with the IMF.

"There isn't anything you can do short of these two major restructurings," he told AFP.

But the traditional ruling class that has dominated politics in Lebanon since the 1975-1990 war was likely to be reluctant.

"Restructuring the public sector has an impact on the political parties, as it is the main financing source for their" patronage system, he said.

"How would they accept that?"

Although some of the 24 new ministers in Mikati's cabinet are technocrats, all have been endorsed by at least one of Lebanon's many competing political parties.

Yahya said drawing up a medium- to long-term rescue plan for the country would be a "major challenge" as the new government lacked any political consensus.

"This government was formed with the business-as-usual mentality so everybody there represents one political leadership or the other," she said.

This means political parties "can use the ministers within the government to block any reform they see as undermining their interests or unpopular in the street".

Will there be elections?
Mikati on Friday vowed to hold May 2022 parliamentary elections on time.

In a country rocked in 2019 by protests calling for the overhaul of the entire political class, some activists see this as a chance to vote out an old guard deemed incompetent and corrupt, and bring in younger experts to actually represent the people's best interests.

But analyst Michel Doueihy said the political parties in power since the end of the civil war were ready to do anything to cling on to power.

The traditional ruling "class is trying through this government to catch its breath" and restore some credibility ahead of the next parliamentary elections, he told AFP.

He said their tactics could even include postponing the polls.



Reaction to Trump Pausing Military Aid to Ukraine 

Servicemen of the 24th Mechanized Brigade, named after King Danylo, of the Ukrainian Armed Forces fire an M109 Paladin self-propelled howitzer towards Russian troops in a front line, amid Russia's attack on Ukraine, near the town of Chasiv Yar in Donetsk region, Ukraine February 28, 2025. (Oleg Petrasiuk/Press Service of the 24th King Danylo Separate Mechanized Brigade of the Ukrainian Armed Forces/Handout via Reuters)
Servicemen of the 24th Mechanized Brigade, named after King Danylo, of the Ukrainian Armed Forces fire an M109 Paladin self-propelled howitzer towards Russian troops in a front line, amid Russia's attack on Ukraine, near the town of Chasiv Yar in Donetsk region, Ukraine February 28, 2025. (Oleg Petrasiuk/Press Service of the 24th King Danylo Separate Mechanized Brigade of the Ukrainian Armed Forces/Handout via Reuters)
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Reaction to Trump Pausing Military Aid to Ukraine 

Servicemen of the 24th Mechanized Brigade, named after King Danylo, of the Ukrainian Armed Forces fire an M109 Paladin self-propelled howitzer towards Russian troops in a front line, amid Russia's attack on Ukraine, near the town of Chasiv Yar in Donetsk region, Ukraine February 28, 2025. (Oleg Petrasiuk/Press Service of the 24th King Danylo Separate Mechanized Brigade of the Ukrainian Armed Forces/Handout via Reuters)
Servicemen of the 24th Mechanized Brigade, named after King Danylo, of the Ukrainian Armed Forces fire an M109 Paladin self-propelled howitzer towards Russian troops in a front line, amid Russia's attack on Ukraine, near the town of Chasiv Yar in Donetsk region, Ukraine February 28, 2025. (Oleg Petrasiuk/Press Service of the 24th King Danylo Separate Mechanized Brigade of the Ukrainian Armed Forces/Handout via Reuters)

US President Donald Trump has paused military aid to Ukraine following his clash with Ukrainian President Volodymyr Zelenskiy last week, a White House official said, deepening the fissure that has opened between the one-time allies.

Here are reactions to the move.

US SENATOR JEANNE SHAHEEN, THE TOP DEMOCRAT ON THE SENATE FOREIGN RELATIONS COMMITTEE:

“By freezing military aid to Ukraine, President Trump has kicked the door wide open for Putin to escalate his violent aggression against innocent Ukrainians. The repercussions will undoubtedly be devastating."

FRENCH JUNIOR MINISTER FOR EUROPE, BENJAMIN HADDAD:

"Fundamentally, if you want peace, does a decision to suspend arms to Ukraine reinforce peace or does it make it more distant? It makes it more distant, because it only strengthens the hand of the aggressor on the ground, which is Russia," Haddad told France 2.

HEAD OF THE UKRAINIAN PARLIAMENT'S FOREIGN AFFAIRS COMMITTEE, OLEKSANDR MEREZHKO:

"On the surface, this looks really bad. It looks like he is pushing us towards capitulation, meaning (accepting) Russia's demands. To stop aid now means to help Putin."

POLISH DEPUTY DEFENCE MINISTER CEZARY TOMCZYK:

Pausing US military aid for Ukraine is "bad news", Tomczyk told private radio Zet.

THE HUNGARIAN GOVERNMENT:

"The US President and the Hungarian government share the same stance: instead of continuing weapons shipments and the war, a ceasefire and peace talks are needed as soon as possible," said a government spokesman.