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Lebanon: We won't pay $1.2bn debt, we must provide basic commodities to people

Christian Fernsby ▼ | March 7, 2020
Lebanon decided not to repay a $1.2 billion Eurobond due Monday.
Hassan Diab
Living in the Middle East   Prime Minister Hassan Diab
Prime Minister Hassan Diab says government decided to suspend payment so it could continue to provide basic commodities to the people.

Topics: Lebanon debt

Foreign currency reserves have fallen to "a worrying and dangerous level which pushes the Lebanese government to suspend payment of the March 9 Eurobond maturity because of a need for these funds," Mr Diab said in an address to the nation following a cabinet meeting on Saturday.

“The decision to suspend payment is the only way to stop the attrition and protect our national interests, while at the same time launching a comprehensive reform programme."

Mr Diab said Lebanon's debt reached $90bn, or 170 per cent of GDP, making it one of the highest in the world. He added that the total debt and interest Lebanon had to pay back in 2020 stood at $4.6bn

He Lebanon's debt was "greater than the country can handle” in the current circumstances and the country would strive to restructure its debt through negotiations with bondholders.