A cabinet decision to increase wages has led to a new crisis in Lebanon after it angered some labor unions for not meeting its expectations and drew strong criticism from business leaders over their fears that the government’s move would shatter the Lebanese economy.

The cabinet will now have to confront the chaos that resulted from its decision on Tuesday to increase the minimum wage to LL700,000 from LL500,000. It also raised by LL200,000 the wages of workers earning less than LL1 million and by LL300,000 those earning between LL1 million and LL1.8 million.

Ministers loyal to Free Patriotic Movement leader Michel Aoun have expressed outrage at a deal reached to raise wages and increase benefits, saying the agreement was only a “tranquilizer.”

The ministers withdrew from the cabinet session held at the Grand Serail on Tuesday to express their reservations about the deal that did not meet the aspirations of the General Labor Confederation as well.

Head of the General Labor Confederation Ghassan Ghosn announced on Thursday that the GLC was suspending its negotiations with the government over its demand for a salary boost after the state budget proposed by Finance Minister Mohammed Safadi called for a value added tax hike.

“This boycott is a warning message to the government ahead of studying the budget,” Ghosn told al-Jadid TV.

A tense atmosphere from a meeting of joint parliamentary committees on the electricity project spilled into the cabinet on Wednesday amid reported verbal clashes between Change and Reform bloc ministers on one side and Health Minister Ali Hasan Khalil.

Media reports said that during a government session held at the Grand Serail an argument erupted between Labor Minister Charbel Nahhas and Khalil, who is Speaker Nabih Berri’s aide, after the Change and Reform bloc minister described a decision reached at the committees meeting as “dissent.”

President Michel Suleiman, Speaker Nabih Berri, Prime Minister Najib Miqati, and Progressive Socialist Party leader MP Walid Jumblat have reached an agreement over the dispute over the electricity file, revealed the daily al-Mustaqbal on Sunday.

The solution calls for allowing the government to control the funding of the draft law that was proposed by Free Patriotic Movement leader MP Michel Aoun.

Hizbullah has mediated with the Free Patriotic Movement to prevent an escalation in the dispute over the electricity draft law proposed by FPM chief Michel Aoun, March 8 sources have told pan-Arab daily al-Hayat.

The dispute began when Aoun threatened to pull his ministers from the cabinet after opposition MPs and lawmakers allied with him rejected the draft law that allows Energy Minister Jebran Bassil, who is Aoun’s son-in-law, to spend $1.2 billion on building power plants without referring to the cabinet.

A heated debate erupted during Wednesday’s cabinet session over designating funds to be spent given the lack of an approved state budget, reported As Safir newspaper on Thursday.

The dispute had initially started during Monday’s cabinet session.

The Mustaqbal bloc condemned on Tuesday the statements of Free Patriotic Movement leader MP Michel Aoun and those of the members of his bloc, saying that they demonstrate “the extent of their spite”.

It said in a statement after its weekly meeting: “They unveil their vengeful intentions aimed at eliminating the other, which is an approach that has been created and perfected by Hizbullah in its political practices.”

Labor Minister Charbel Nahhas stated on Monday that OGERO Telecom General Manager Abdul Monhem Youssef’s days in the Lebanese state are numbered.

He said during the launching of a free internet service at the Sioufi park in Beirut: “He tried to obstruct the functioning of the Telecommunications Ministry, but we succeeded in providing this service in Sioufi park.”

OGERO Telecom General Manager Abdul Monhem Youssef denied on Friday reports that he had halted granting DSL and HDSL licenses to the Telecommunications Ministry and private companies.

He told the Central News Agency that OGERO is waiting to accept new requests to install DSL internet connection because of a shortage of modems caused by the Telecom Ministry’s decision to stop funding the company.