Lebanese President Michel Aoun meets with Prime Minister-designate Saad al-Hariri at the presidential palace in Baabda, June 22, 2018. Photo: Reuters / Mohamed Azakir / File.

Lebanon appeared to move closer to forming a new government on Wednesday after months of wrangling, with politicians from rival political factions indicating they believed it would happen this week.

Lebanon urgently needs a government to start addressing its extensive economic ills, which include a public debt equal to around 150 percent of GDP and years of low growth.

Asked if the government would be formed within 24 to 48 hours, Abdul Rahim Mrad told al-Jadeed TV: “I believe it will have been formed, I believe so because the atmosphere today is this.”

He is one of six pro-Hezbollah Sunni Muslim MPs whose representation in the cabinet has been one of several obstacles to the formation of the government to be led by prime minister-designate Saad al-Hariri, also a Sunni.

Hariri said on Tuesday that this week would be decisive in efforts to form the government, but warned that this was “a last chance” to settle things.

Caretaker Information Minister Melhem Riachi, of the anti-Hezbollah Christian Lebanese Forces party, wrote on Twitter: “And finally it is concluded on Friday Feb 1 2019,” without elaborating.

Discussions over a new national unity government began after May’s national election, the first in nine years, and aimed to distribute cabinet positions among Lebanon’s main political blocs and according to its delicate sectarian balance.

‘A serious atmosphere’

There have been several moments when a government seemed close, but ultimately failed to emerge, including in December when Hariri indicated a breakthrough might be hours away.

Lebanon’s economy and financial system have shown resilience during previous periods of political paralysis, but Finance Minister Ali Hassan Khalil said last month that the country faced an economic crisis that was at risk of becoming a financial one.

Concerns over the economy have been reflected in Lebanese bond prices and the costs of insuring against its public debt.

The International Monetary Fund warned in June that urgent measures are needed to put Lebanon’s finances on a sustainable footing.

The Hezbollah-aligned Sunni MPs met senior Hezbollah official Hussein Khalil on Tuesday night. The heavily-armed Iran-backed Shi’ite Hezbollah is the most powerful group in the country.

Asked how the latest efforts differed from previous failed attempts to form the government, Mrad said: “The difference is there is a serious atmosphere.”

He noted that Gebran Bassil — a Christian politician at the heart of the talks — had “intensified his activities” in the last 24 or 48 hours.

The front page headline of the pro-Hezbollah al-Akhbar newspaper declared on Tuesday: “Balanced concessions accelerate the birth of the government.”