Lebanon's Hariri sees 'last chance' to form government

BEIRUT - This week will be decisive in efforts to form a government in Lebanon, representing a last chance to break the deadlock, prime minister-designate Saad al-Hariri said on Tuesday.

The formation of a government nine months after an election is seen as a vital first step towards boosting confidence in the economy as political leaders warn of crisis.

The International Monetary Fund has called for urgent fiscal reforms to address the country's large public debt, equivalent to about 150 percent of GDP.

"Matters are positive and will become clear within two days... This week is decisive, positively or negatively," Hariri was cited as saying in a statement from his office, adding that he was "cautiously optimistic".

The situation could not go on like this, and this week represented "a last chance to settle things and to launch the government formation," Hariri was quoted as saying.

Members of parliament from President Michel Aoun's party, the Free Patriotic Movement, said in a statement the government could be formed this week if concessions were made by all sides.

If not, then "next week we will have something else to say ... because then it will be clear that is an intention to obstruct the birth of the government", the FPM's Cesar Abi Khalil said in a statement after a meeting of the MPs.

The FPM's Alain Aoun said the latest effort to clinch a deal was "very, very serious" but cautioned of a "small margin for a last-minute bad surprise".

"I think this time, if there isn't a conclusion, it means we are really facing an external problem," he said, suggesting that in such a scenario foreign interference would be to blame, without giving further detail. Foreign powers have long held major and sometimes decisive sway over Lebanese politics.

On Saturday, the leader of Lebanon's powerful Iran-backed Hezbollah movement said "extraordinary efforts" were being made to form the government, but two obstacles remained - how to include a group of six Sunni lawmakers in the cabinet and the distribution of government portfolios among the political parties.