Lebanon can no longer bear the national debt, Prime Minister Hassan Diab said in a TV speech on Saturday. The money left over by the country must be used to meet the basic needs. It is the first time that the country has been unable to meet its payment obligations.
This Monday, the country has to pay an outstanding bill of 1.2 billion euros. But Lebanon cannot afford that amount, says the prime minister appointed in January.
Lebanon wants to talk to creditors to restructure the debt. According to the prime minister, the country has a “dangerous shortage” of foreign currency, which would normally be used to repay the debts.
Lebanon has been in serious financial crisis for months. The debts currently amount to around 80 billion dollars, about 170 percent of the Gross National Product (GNP). Diab says that more than 40 percent of the population may soon have to live in poverty if the country does not survive the crisis.
“The Lebanese lived a dream that turned out to be a delusion, as if everything was fine, while Lebanon drowned in more and more debts and interest payments,” Diab said during his speech. “Can a country’s economy be built on debt? Can a nation ever be free if it perishes in debt?”
Lebanese are seeing savings evaporate
Large-scale protests against the economic slump, corruption and poor state of public facilities led to the fall of Prime Minister Saad Hariri in October.
Since then, the country has only delved deeper into the crisis: companies are closing, unemployment is rising and the country is building up more and more debt.
The Lebanese pound is increasingly losing value against the dollar, raising the price of foreign products. Lebanese people are also seeing part of their savings evaporate due to the sharply falling Lebanese pound.
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