EU urges new Lebanon PM to form government ‘without delay’

Najib Mikati, who has twice served as premier before, said he does not ‘have a magic wand and cannot achieve miracles’

Prime Minister-designate Najib Mikati speaks to the media after his meeting with President Michel Aoun and assigned to form a new government (EPA)

The European Union has urged Lebanon’s ruling parties to form a government without delay after one of the country’s richest men was appointed to be prime minister.

Najib Mikati, a billionaire who has twice served as premier before, was tapped to the post by President Michel Aoun, after Saad Hariri earlier this month gave up a torturous months-long attempt to form a cabinet.

But there are concerns Mr Mikati too will be unable to break the impasse - particularly as he is widely considered to be part of the political class responsible for bankrupting the country.

It is now of crucial importance that a credible and accountable government is formed in Lebanon without delay, one that is able to address the severe economic and social crises the country is facin

Statement by the European Union

Lebanon is in the grips of one of the world’s worst economic collapses in 150 years according to the World Bank that blamed a “deliberate depression” anchored in mismanagement and corruption for the spectacular crash.

The EU ratcheted up the pressure  on Monday saying, “It is now of crucial importance that a credible and accountable government is formed in Lebanon without delay, one that is able to address the severe economic and social crises the country is facing.”

Millions of dollars of international aid have been pledged to Lebanon after an August blast in Beirut killed over 200 people and destroyed swathes of the capital. However it is dependent on the formation of a new government and key reforms.

Pigeons fly over destroyed containers at the port of Lebanon's capital Beirut (AFP via Getty Images)

The country has been leaderless since last summer when the then cabinet resigned in the wake of the explosion after it emerged the prime minister, president, and senior security and port officials knew of the existence of a potentially deadly stockpile of explosives that caused the blast but had done nothing about it.

Mr Hariri, also a former prime minister, was chosen to take over but failed to be able to present a cabinet line up which all the notoriously divided parties would agree to.

Now the country is at breaking point: the currency has lost 95 percent of its value in a year, food prices have in some cases quintupled while chronic fuel shortages have lead to rolling 20 hour power cuts. According to the United Nations three quarters of the population do not have food or access to money to buy food.

And so the EU said: “We call on the Lebanese political leaders to cooperate and allow for the swift formation of a credible and capable government, in the interest of the people of Lebanon.”

Mr Mikati vowed to try to form a cabinet but said he needed the country to unify.

"Alone, I don’t have a magic wand and cannot achieve miracles," he told reporters on Monday.  "We are in very difficult situation ... it is a difficult mission that can only succeed if we all work together."

The new government faces the extraordinary task of pushing through critically needed reforms as well as resuming talks with the International Monetary Fund for a rescue package.

One of the richest men in Lebanon, Mr Mikati became a favourite for the post after he was endorsed by most of Lebanon’s political parties, including the powerful Iran-backed militant Hezbollah group and the other major Shiite party, Amal, led by Parliament Speaker Nabih Berri.

Mr Mikati founded the telecommunications company Investcom with his brother Taha in the 1980s and sold it in 2006 to South Africa’s MTN Group for $5.5 billion. However his reputation was marred by corruption charges which were brought against him by a judge in 2019 in a case involving accusations of illicit gains related to subsidised housing loans. He dismissed the charges as politically motivated. The case never went to trial.

Despite this Mr Mikati was endorsed by former Sunni prime ministers including Hariri,  but faces Christian opposition from quarters including the president’s own bloc, now led by his son-in-law Gebran Bassil.

The political deadlock, driven by a power struggle between Aoun and Hariri over the powers of the president and prime minister, has worsened a crippling economic and financial crisis.

I decided, after relying on God, to take this step and try to limit the fire’s spread

Najib Mikati, Lebanon’s new prime minister

And so news of Mr Mikati’s appointment buoyed the local currency which had been trading at an unprecedented 23,000 Lira to the dollar despite still being pegged at 1500.

On Monday it rose to 17,500 lira to the dollar.

Mikati’s designation would be the third so far since the government resigned in the wake of the August Beirut blast.

The first to try to form a government was Lebanon’s former ambassador to Germany, Mustafa Adib, who resigned last September, nearly a month after being designated prime minister. Hariri was appointed next and stepped down after 10 months.

"We were on the verge of collapse, but when you see there’s a fire in front of you and you see it spreading every day,” Mr Mikati said. “I decided, after relying on God, to take this step and try to limit the fire’s spread.”

Additional reporting from agencies