Lebanon will form a new government despite the obstacles, says caretaker Foreign Minister Gebran Bassil

Lebanon will definitely form a new government despite the obstacles, its caretaker foreign minister said on Wednesday, after President Michel Aoun intervened in the stalled process and warned of a "catastrophe" if his efforts failed.

Heavily indebted and with a stagnant economy, Lebanon desperately needs a new government to implement economic reforms that are required to put its public finances on a more sustainable footing and unlock pledges of foreign aid.

"Partnership between the president and the prime minister along with the national consensus will certainly lead to the formation of a new government, despite all obstacles," Gebran Bassil, Aoun's son-in-law and head of the political party he founded, told an investment conference in London.

Prime Minister-designate Saad al-Hariri, also attending the conference, told reporters, said he was "always optimistic" when asked about the prospects of forming a new government following seven months of political wrangling.

Aoun said on Tuesday the government formation could not be resolved in the traditional way between the prime minister-designate and other parties, meaning he had to get

involved.

Hariri said on Twitter that the new government would be firmly committed to reforms agreed at a donor conference this year, including fiscal reforms.

Agreement on the make-up of the new cabinet has met a series of obstacles as Hariri has sought to forge a deal parcelling out 30 cabinet posts among rival groups according to a sectarian political system.

The final hurdle has been over Sunni Muslim representation, with the powerful Iran-backed Shia Muslim group Hezbollah demanding a cabinet seat for one of its Sunni allies who gained ground in the election.

Analysts believe one compromise could be for Aoun to nominate one of the Hezbollah-aligned Sunnis, or a figure acceptable to them, among a group of ministers named by the president.    (Reuters)