Lebanese have feared for a while that the Lebanese government will take the decision to not pay its Eurobonds debt which equals to $1.2 billion in Eurobonds. However, those fears have turned into reality when the new Lebanese Prime Minister- Hassan Diab, declared in his speech that Lebanon will in fact not go through with the payments; although there have been previous announcements regarding the compliance of Lebanon with the IMF bailout plan.
What does that mean? This is the first time in history that Lebanon does not pay its Eurobonds dues. However, it is not the first time that a country fails to fulfill its payments either.
The decision to not pay the Eurobonds have been based in accordance with the Lebanese internal reserves which have reached a new low level, leaving Lebanon in a very critical state and forced to withhold all payments on the Eurobonds, which were due on the 9th of march, said PM Hassan Diab.
This leaves Lebanon in a huge dilemma as well as in a serious economic danger zone as experts believe that the IMF bailout plan was in fact the best solution for the country, as Lebanon is in no position to restructure its huge debt. It is also important to state that most if not all of Lebanon’s local debt is owed to local banks, which means that the Eurobonds which fall under the category of foreign debts, is not all the debt that Lebanon is drowning in.
By: Lana Fadel
Picture Source: https://blog.blominvestbank.com/5050/lebanese-eurobonds-market-halted-its7-day-improvement/
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