Lebanon announced on Saturday a "suspension" of repayment of Eurobond bonds that will be due after two days, in default of debt payments for the first time in its history, with its affirmation of seeking to negotiate debt restructuring, in light of a financial crisis that protects foreign currency reserves.
In a message he sent to the Lebanese after a cabinet session, Prime Minister Hassan Diab said the precautions "have reached a critical and dangerous level, which is pushing the Lebanese government to suspend the March 9 entitlement of Eurobonds."
In theory, the Lebanese state must repay $ 1.2 billion of Eurobond bonds, which are treasury bonds issued in dollars, and private banks and the central bank possess part of them.
Lebanon is suffering under debts amounting to 92 billion dollars, which constitutes about 170% of GDP, according to the credit rating agency "Standard and Poor's." This percentage is among the highest in the world.
This is the first major decision of this government, which was formed last January after months of talks, and in light of an unprecedented protest movement since last October, rejecting a political class seen as corrupt and powerless.
Diab added, "The Lebanese state will seek to restructure its debts in a manner consistent with the national interest by entering into fair and well-intentioned negotiations with all creditors."
He said that "the decision to suspend payment (...) is the only way to stop attrition and protect the public interest, in conjunction with the launch of a comprehensive program of necessary reforms," stressing in his speech that "a plan to restructure the banking sector must be prepared."
Lebanon expects two similar entitlements in April and June, amounting to $ 1.3 billion.
The non-payment decision won the support of the three presidencies at a meeting in the presidential palace in Baabda attended by the President of the country, the Speaker of Parliament, the Prime Minister and a number of officials, including the Minister of Finance and the governor of the Central Bank.
In the same context, a source early Sunday told Reuters that it is expected to start formal debt restructuring negotiations between Lebanon and holders of bonds within about two weeks, after the heavily indebted country announced that it could not meet the payments.
Protests
In parallel, Lebanese activists participated in a march in the city of Tire (in the south of the country), rejecting successive government policies for decades, which they held responsible for the deteriorating economic conditions in the country.
Activists called for the need to recover what they described as looted money and hold corrupt people to account.
In Tripoli (North Lebanon), activists participated in a demonstration that roamed the city's streets to demand the recovery of the management of the mobile phone sector from private companies and hand them over to the public sector.
Activists also called for activating the judiciary to combat corruption in government institutions.