Lebanon's Prime Minister Hassan Diab speaks during a televised address to the the nation at the governmental palace in Beirut, Lebanon March 7, 2020. Dalati Nohra/Handout via REUTERSBEIRUT: Lebanon announced it cannot meet its debt payments and halted a Mar 9 bond payment of US$1.2 billion on Saturday , setting the heavily indebted state on course for a sovereign default as it grapples with a major financial crisis.
"How can we pay creditors abroad when the Lebanese cannot get their money from their bank accounts?" Diab said."Our debt has become greater than Lebanon can bear, and greater than the ability of the Lebanese to meet interest payments." There has been no sign of a bailout from foreign states that aided Lebanon in the past. Western governments insist Beirut first enact long-delayed reforms to fight waste and corruption.
"We do not need a banking sector four times the size of our economy. We will have to come up with a plan to restructure the banking sector," he said. Lebanon has a total of some US$31 billion in dollar bonds that sources told Reuters on Friday the government would seek to restructure. Lebanon's public debt is worth about US$89.5 billion, with around 37 per cent of that in foreign currency.
This outcome isn't surprise to the lenders.
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