For the first time in its history, Lebanon has defaulted on its debt payment, Prime Minister Hassan Diab announced on Saturday.
“The debt has become bigger than Lebanon can bear, and bigger than the ability of the Lebanese to meet interest payments,” Diab said, announcing that his country would not be making a bond payment of $1.2 billion (€1.05 billion) due on Monday.
Lebanon’s public debt has exceeded $30 billion and in recent months its currency has plummeted which has led unemployment to rise sharply and sparking nationwide protests against the government’s inability to tackle the country’s economic crisis.
Diab, 61, became prime minister in January after protests led to the resignation of the previous government. In a live televised address on Saturday, Diab said that negotiations to restructure the country’s debt would continue “with all creditors… in a manner consistent with the national interest”.
Financial analysts pointed out that the only way out of the crisis would be a rescue deal with the International Monetary Fund (IMF), but that would require Lebanon to implement economic reforms.
One Lebanese pound is currently worth €0.00058.
Title image: Lebanese Prime Minister Hassan Diab, gives a speech at the Government House in Beirut, Lebanon, Saturday, March. 7, 2020. Lebanon’s prime minister said Saturday the government will suspend payment of $1.2 billion in loans, marking the crisis-hit country’s first-ever default on its sovereign debt. (Dalati Nohra/Lebanese Government via AP)