Beirut: Lebanon’s top leaders oppose repaying the country’s looming debt maturities, the presidency said in a statement on Saturday after a meeting at the presidential palace.
The president, prime minister, parliament speaker, central bank governor and head of the country’s banking association attended the meeting.
“The attendees decided unanimously to stand by the government in any choice it makes in terms of managing the debt, except paying the debt maturities,” the statement said.
New phase of crisis
Debt default would mark a new phase in a financial crisis that has hammered Lebanon’s economy since October, slicing around 40% off the value of the local currency and leading banks to deny savers full access to deposits.
The decision to default on bond repayment comes just two days before the state is due to pay back holders of a $1.2 billion Eurobond due on March 9.
“This unprecedented event is the result of an accumulation of policies, crimes and choices that exhausted the public finances,” said senior MP Alain Aoun, senior figure in the Free Patriotic Movement party founded by President Michel Aoun, his uncle.
“There is no use in crying over the ruins ... what is helpful now is starting a rescue plan to get out of the bottom of the abyss as Greece did,” he added, writing on Twitter.
Lebanon hired US investment bank Lazard and law firm Cleary Gottlieb Steen & Hamilton LLP last week as advisers on the widely expected restructuring.
The financial crisis came to a head last year as capital inflows slowed and protests erupted over state corruption and bad governance.
The import-dependent economy has shed jobs and inflation has risen as the pound has slumped, adding to grievances that have fuelled protests.