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Aoun warns Lebanon will go 'to hell' unless government agreed

Mustapha Adib talks to the media after being named Lebanon's new prime minister at the presidential palace in Baabda

By Ellen Francis and Tom Perry

BEIRUT (Reuters) - President Michel Aoun warned on Monday Lebanon was going "to hell" if a new government was not formed, and said agreeing one could need a miracle after positions had hardened between rival factions.

His televised address underlined the severe challenges facing French efforts to get Lebanon's fractious leaders to form a new government and rescue the country from financial meltdown.

The crisis, exacerbated by the devastating August explosion at Beirut port, marks the worst threat to Lebanon's stability since the 1975-90 civil war. A deadline agreed with Paris for forming the government passed last week.

The process hit a logjam over the demand of Lebanon's two dominant Shi'ite parties, Iran-backed Hezbollah and its ally the Amal Movement, to name Shi'ite ministers including the finance minister.

Aoun, a Hezbollah ally, said his proposals for compromise had not been accepted. He depicted the problem as a standoff between the Shi'ite parties on the one hand and Sunni Prime Minister-designate Mustapha Adib along with former prime ministers who support him on the other.

When asked where Lebanon was headed if there was no agreement, Aoun said "of course, to hell".

Asked by reporters if his comments meant there was no hope of a new government, he said: "No, there might be a miracle".

"We are today facing a government formation crisis which should not have happened because the events that await Lebanon do not allow a minute to be wasted," said the president, a Maronite Christian under the country's sectarian power-sharing system.

Aoun said the premier did not want to consult parliamentary blocs, which should not be excluded. At the same time, he added, it was not permissible for one party to impose ministers and the constitution did not allocate any ministry to any specific sect.

"With the hardening of positions there does not appear to be any solution on the horizon because all the proposed solutions amount to a 'victor and a vanquished'," he said.

Adib called earlier for all sides to cooperate to form a government and secure the immediate success of French efforts.

Last week, reports suggested Adib may step down. He had proposed switching control of ministries, some of which have been held by the same factions for years.

French President Emmanuel Macron had called Lebanese politicians as Paris tried pressing them to name a cabinet swiftly and embark on reforms.

"The French initiative is the only hope left. The alternative is continuing the descent into the abyss," said Alain Aoun, a senior member of the FPM party founded by the president, his uncle.

The economy is collapsing after decades of state waste, graft and mounting debt. Banks have frozen people out of their savings and the currency has crashed. Inflation and poverty have soared.

With the country running out of dollars, the central bank has helped subsidize fuel, wheat and medicine imports.

Asked about dwindling foreign currency reserves after his Monday speech, Aoun said: "The money will run out. What can we say? (To) those in charge of managing the money, why did this happen?"

(Reporting by Ellen Francis and Tom Perry; Editing by Alex Richardson and Raissa Kasolowsky, William Maclean)