Lebanon Names ICJ Chief as Prime Minister of Distressed Nation
(Bloomberg) -- Lebanese diplomat Nawaf Salam, a former United Nations envoy and current head of the International Court of Justice, has been named the country’s prime minister with the task of forming a new government.
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Newly-elected President Joseph Aoun held binding parliamentary consultations Monday to appoint a PM, with a majority of lawmakers voting in favor of Salam, Aoun’s office said. Current Prime Minister Najib Mikati received nine votes.
Aoun, who was seen as having the support of the US and Gulf states, was elected Lebanon’s first president in more than two years last week. Salam’s nomination shows Lebanon is breaking with its old guard and shifting closer to the West, in a sign of Iran’s waning influence in the region.
A lawyer and judge, Salam served as the country’s UN envoy for 10 years and has always been popular with Lebanese demanding political and economic reform. He was awarded the French Légion d’honneur at the rank of officer in 2012 and has been a member of the ICJ since 2018. He was named head of the court last year, though is now expected to step down from the position.
Salam will be faced with the daunting task of forming a new government that is expected to implement reforms demanded by the International Monetary Fund to unlock a $3 billion package as well as international aid. The incoming cabinet will also oversee parliamentary elections slated for next year and carry out the implementation of the ceasefire agreement with Israel that ended its two-month war with Hezbollah late last year.
Israel severely weakened Hezbollah during an intense offensive by air and land lasting more than two months, killing the US-designated terrorist group’s longstanding leader, Hassan Nasrallah, and depleting its weapons stockpile. That limited the ability of the organization, which is also a political party that holds significant sway in parliament, from sabotaging the electoral process.
Hezbollah lawmakers refrained from voting for any candidate after Salam secured the majority and said they demanded a government of national consensus.
“The market reaction would be more favourable of a Salam appointment as it fits in well with the popular investment scenario that Lebanon is moving away from its previous dominance by Hezbollah, and by extension Iran,” said Mark Bohlund, senior credit research analyst at REDD Intelligence.
“Salam would be better placed to raise external financial support.”
Lebanese Eurobonds, which the country defaulted on during the height of its financial crisis in 2020, have rallied in recent weeks with traders betting that a weaker Hezbollah meant a major obstacle to reforms has been removed and Lebanon could see its old benefactors helping again.
Yet, lawmakers who have squabbled over how to address the crisis are still in parliament and have the leverage to block decisions. Lebanon still needs to overhaul the balance sheet of its central bank and local lenders who are facing an $80 billion hole.
--With assistance from Omar El Chmouri.
(Updates with official announcement of newly elected premier)
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