News World Lebanon hopes debt talks could be wrapped up within 9 months

Lebanon hopes debt talks could be wrapped up within 9 months

Negotiations to restructure Lebanon‘s foreign currency debt should not last more than nine months if well-intentioned, the economy minister told a local broadcaster, as the country headed for its first sovereign default.

Hit by a major financial crisis, Lebanon declared on Saturday it could not pay forthcoming maturities – the first of which is a $1.2 billion bond due on Monday. The prime minister called for fair restructuring negotiations.

The default will mark a new phase in a crisis that has hammered the economy since October, slicing around 40% off the value of the currency, denying savers free access to their deposits and fuelling unemployment and unrest.

The financial crisis is seen as the biggest risk to Lebanon‘s stability since the end of the 1975-90 civil war.

Face-to-face negotiations between Lebanon and bond holders are expected to begin in about two weeks, a source familiar with the matter told Reuters.

Prime Minister Hassan Diab, in a televised address to the nation on Saturday, said foreign currency reserves had hit a “critical and dangerous” level and were needed for basic imports. Lebanon had therefore suspended the March payment.

The financial crisis came to a head last year as capital inflows slowed and protests erupted over decades of state corruption and bad governance.

“The negotiation process will last for months and if we have good intentions will not go on for more than nine months,” Raoul Nehme, the economy minister, told broadcaster al-Jadeed in comments published on its website overnight.

Reuters could not immediately reach him for comment.

“The government is now waiting for the position of the Eurobond holders,” Nehme said, adding that he expected them to adopt “positive” positions.

Referring to the possibility of Lebanon being sued abroad, he said creditors may bring legal cases against the central bank but would not win.

Lebanon has some $31 billion in dollar bonds that sources say the state wants to restructure.

Lebanon‘s public debt has reached around 170% of gross domestic product, meaning the country is close to being the world’s most heavily indebted state, Diab said.

Lebanon‘s banks, big holders of the debt, are ready to talk with foreign creditors as the government seeks to restructure, a source familiar with the matter said on Saturday.

There was no timetable yet for any restructuring and the discussions with foreign creditors are likely to start slowly, the source said. The Lebanese banking association has appointed Houlihan Lokey as financial adviser to help with the process.

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 against waste and corruption.

Many analysts believe the only way for Lebanon to secure financial support would be through an IMF programme.

But this is opposed by the powerful, Iran-backed group Hezbollah, which has said conditions the IMF would seek to impose would cause a “popular revolution”.

Lebanon has however sought IMF technical assistance.


Top Stories

Huge 8500 euro fine for unmarked tobacco products

  A twenty nine year old was fined 8 and a half thousand euro for unmarked tobacco products that were discovered by police at his...

Ankara provocatively announces Varosha works, as Turkish minister illegally visits

  Turkey's Environment and Urban Planning minister Murat Kurum, illegally visited the fenced off city of Famagusta, accompanied by a delegation, the latest in a...

Germany and France prepare new lockdowns as COVID sweeps Europe

  Germany and France were preparing to announce restrictions approaching the level of last spring’s blanket lockdowns, as COVID deaths across Europe rose almost 40%...

Rain arrives over the weekend. but temperatures much higher than seasonal average

  A warm air current is still affecting the area, but showers and possibly storms are expected on Saturday, with temperatures dropping slightly, but remaining...

Digital Policy ministry ready for distance learning if lockdown imposed

  The Digital Policy ministry assured it was ready on the technical side to organise distance learning, if a total lockdown was imposed over the...


Squash soup

Ingredients: 1 kg pumpkin, cut into small cubes, approximately 5 cups 2 medium (400g) sweet potatoes, cut into cubes, approximately 2 ½ cups 1 chopped leek, only...


No visit to Cyprus is complete without enjoying the traditional meal of many small dishes known as ‘meze’. This large feast, which has been a...

Prawns with fried cheese, barley shaped pasta

Put the barley shaped pasta into a small pan with salted water, bring to a boil and when tender, drain. Peal the prawns leaving...

Salmon and shrimp sheftalies

Mix all ingredients for tabbouli in a bowl and keep to one side so flavours can combine. Prepare the sheftalies: wash and soak the casing...