Lebanon says it would default on its Eurobond debt for the first time and seek out restructuring agreements amid a spiralling financial crisis
Lebanon's President Michel Aoun heads a financial meeting with Prime Minister Hassan Diab, Parliament Speaker Nabih Berri and Lebanon's Central Bank Governor Riad Salameh at the presidential palace in Baabda, Lebanon, March 7, 2020.
"The Lebanese state will seek to restructure its debts, in a manner consistent with the national interest, by entering into fair negotiations ... with all creditors," he said in a live address. Foreign currency inflows have slowed, Lebanon's pound has plunged in value and banks have imposed tough restrictions on dollar withdrawals and transfers.Local banks, which own a chunk of the Eurobonds maturing on March 9, had argued against a default, saying it would pile added pressure on a cash-strapped banking sector and compromise Lebanon's ties with foreign creditors.
"We shouldn't have to pay the price of government shortcomings," said Nour, a 16-year-old demonstrator, during a rally outside the central bank's headquarters in Beirut.Lebanon's sovereign debt rating slid into junk territory long ago, but investor confidence has fallen further since the mass protests erupted.
The crisis "is the creation of a failed and criminal political class that has lied and robbed for more than 30 years," he said on Facebook.
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