Lebanon’s top leadership opposes repaying the country’s debt, the presidency said on Saturday, setting the heavily indebted state on course for a sovereign default as it grapples with a financial crisis.
Prime Minister Hassan Diab was to announce the decision not to pay and call for negotiations with creditors to restructure the debt, a senior politician involved in the Eurobond discussions said.
A default on Lebanon’s foreign currency debt will mark a new phase in a crisis that has hammered the economy since October, slicing around 40% off the value of the local currency.
The crisis is seen as the biggest risk to Lebanon's stability since the end of the 1975-90 civil war.
Lebanon has a $1.2 billion Eurobond due on March 9, part of a portfolio of some $31 billion in dollar bonds that sources told Reuters on Friday the government would seek to restructure in negotiations with its creditors.
The announcement from the Presidency followed a meeting attended by the President, Prime Minister, Parliament speaker, central bank governor and head of the country's banking association.
