Deal reached for new unity government in Lebanon

Lebanese leaders reached a deal on Thursday to set up a new unity government, three political sources from different factions said, ending nine months of wrangling over how to share out cabinet portfolios in the heavily indebted state.

Reuters report how this will be the third government led by the Western-backed Saad al-Hariri, who has vowed to carry out economic reforms needed to put public finances on a sustainable path and to unlock billions in funding to boost low growth.

The government will be announced on Thursday, the sources said. Ali Hassan Khalil will stay on as finance minister, a senior official said.

Negotiations on the new national unity government including Lebanon’s main political blocs began after a May 6 election, in which allies of the Iranian-backed Shi’ite group Hezbollah gained ground.

While Lebanon’s economy and financial system have shown resilience during previous periods of political paralysis, investor concerns have been reflected of late in bond prices and the costs of insuring against debt default.

via Reuters