Lebanon announces formation of government

Lebanon announces formation of government

BEIRUT (Reuters) – Lebanon agreed a new government on Thursday, ending months of wrangling between rival political factions that has added to concerns for its struggling economy and massive public debt.

The news boosted Lebanon’s bonds, with a 2037 dollar issue jumping in price by 4.3 cents to its highest since August.

Western-backed Saad al-Hariri will face a big challenge in his third term as prime minister in trying to deliver reforms to address the dire state finances and unlock billions of dollars in pledged aid and loans to boost low growth.

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The new government will include most Lebanese political factions, who have been negotiating the make-up of the cabinet since a May 6 election, in which allies of the Iran-backed Hezbollah group gained ground.

Finance Minister Ali Hassan Khalil, from Parliament Speaker Nabih Berri’s Amal party, and Foreign Minister Gebran Bassil, the leader of President Michel Aoun’s Free Patriotic Movement, retained their positions, the presidency announced.

The Iranian-backed Shi’ite movement Hezbollah chose the new health minister, Jamil Jabak, although he is not a member of the group, moving beyond the more marginal role it has played in past governments. The ministry has the fourth-biggest budget in the state apparatus, the outgoing minister has said.

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