March 8 (UPI) — Lebanon’s prime minister announced on Saturday that the country will seek to restructure its massive debt rather than pay a $1.2 billion Eurobond due Monday.
Hassan Diab made a televised address to the nation, which is gripped by a financial crisis and dwindling cash reserves, saying that it was necessary to default on the debt in order to secure the basic needs of its population.
This is the first time Beirut has defaulted on its nearly $90 billion debt.
According to Financial Times, the country was spending about half its government revenues on interest alone.
The Lebanese pound has devalued sharply relative to the U.S. dollar in recent months, and banks in the country have limited the amount of money bank members can withdraw, as well as transfers abroad.
“How can we pay foreign creditors when the Lebanese can’t access their deposits? How can we pay creditors and leave hospitals with a shortage of medical supplies? How can we pay the creditors while there are people on the streets who can’t afford to buy bread?” Diab said.
Over the last several months the country’s financial crisis has spurred sometimes-violent protests as demonstrators have told media they don’t trust the government, just elected in January, to manage the situation.
