US sanctions 'slow down' Lebanon government formation: report

Prime Minister-designate Moustapha Adib, who was nominated on August 31 by Lebanon's political factions, was given two weeks to get a cabinet in place to implement reforms laid out in a French roadmap.

New US sanctions imposed on the senior aide to powerful Shia Parliament Speaker Nabih Berri and a Christian politician now complicate his task, three political sources told Reuters.

Months of protracted negotiations on how to distribute posts among Christian and Muslim factions typically precede the formation of Lebanon's governments.

On Tuesday, the US slapped sanctions on Berri advisor Ali Hassan Khalil, a former finance minister, and Christian Marada politician Youssef Fenianos, a former public works minister.

Washington and Paris, while both demanding reform in Lebanon, stand at odds over their policy on Iran-backed Hezbollah.

While Washington has designated the anti-Israel militant group as a terrorist organisation, France regards it pragmatically, recognising its infleuntial constituency among the Shia Muslim community in Lebanon.  

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Some observers believe the spectre of US sanctions could speed up government formation, scaring Hezbollah allies such as President Michel Aoun's Free Patriotic Movement into cooperation.

Yet according to three sources from different Lebanese factions, the new sanctions have had the opposite effect on Berri.

The head of the Amal party has responded to the sanctions on Khalil by hardening his stance on naming the next finance minister, a post he has allocated since his aide first took the job in 2014.

As a result, Lebanon's Prime Minister-designate now has a much harder time changing leadership in that ministry and other ministries where donors demand reform, one of three anonymous political sources told Reuters.

The ministries have been run by the same factions for years and will likely sit tight if Berri is allowed to name the next finance minister.

"There is definitely a complicating factor from the U.S. sanctions," said the source from outside the Shia political camp.

"Hours if not minutes before the sanctions, all the indications were positive, that (the Shia camp) were going to facilitate the government formation. Immediately after the sanctions, there was this knee-jerk reaction," the source said.

The source added that Berri's and Hezbollah's willingness to give ground to support the French initiative was something that would be clear within the next 48 hours.

Political sources say Adib, who is seeking to form a cabinet to deliver reform in a country grappling with a financial meltdown and the aftermath of a catastrophic port explosion, will step down if he is unable to procced according to plan.

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