On Saturday, March 7th, President Michel Aoun headed a cabinet session in Baabda. The aim of the meeting was to share the government’s plan of action regarding Lebanon’s maturing Eurobond payment.
The session commenced at 1 PM with PM Hassan Diab and Speaker of Parliament Nabih Berri present alongside the president.
Additionally, the most prominent banking and political figures of Lebanon attended the closed meeting to be informed of the government’s final decision regarding Lebanon’s debts.
Upon the conclusion of the financial, economic meeting in the presidential palace, Director-General of the Lebanese Presidency Antoine Choucair made a statement.
Notably, Choucair’s relatively short speech hinted at the government’s decision.
He said that, during the meeting, the attendees studied and discussed “the financial and surrounding conditions,” two days before the deadline of the $1.2 billion Eurobond.
Moreover, he stated that the attendees have “unanimously decided to stand with the government on any option it will adopt in the area of debt management, except for the payment of outstanding debts.”
مدير عام رئاسة الجمهورية بعد الاجتماع المالي الاقتصادي في بعبدا: قرر المجتمعون بالاجماع الوقوف الى جانب الحكومة في اي خيار ستعتمده في مجال ادارة الديون باستثناء دفع الديون المستحقة— Lebanese Presidency (@LBpresidency) March 7, 2020
“Emphasis was placed on adopting and implementing the comprehensive integrated plan based on financial, administrative, and banking reforms,” he added.
In conclusion, the official explained that the reforms would “coincide with an economic and social recovery plan, as contained in the ministerial statement.”
مدير عام رئاسة الجمهورية بعد الاجتماع المالي الاقتصادي في بعبدا: تم التركيز على اعتماد وتنفيذ الخطة الشاملة المتكاملة المبنية على اصلاحات مالية وادارية ومصرفية تتزامن معها خطة نهوض اقتصادية واجتماعية كما وردت في البيان الوزاري— Lebanese Presidency (@LBpresidency) March 7, 2020
Naturally, it cannot be said with any certainty that Lebanon is defaulting on its repayment yet. It will be clear when PM Hassan Diab announces the official decision in his scheduled speech later on Saturday.
Nonetheless, especially after Choucair’s latest remarks, it strongly appears to be the more likely option.
If Lebanon is indeed headed to defaulting on its debts for the first time in its history, its reputation – and thus its economy – will suffer a serious blow.