Lebanon’s PM Hassan Diab has announced his country is unable to pay the $1.2 billion Eurobond due on March 9 and will default for the first time. This comes amid a government crisis and currency plummeting by 40 percent.
The move to not pay the outstanding debt and to launch upcoming negotiations with creditors was made unanimously at a cabinet meeting before Diab made the announcement on Saturday.
This decision marks the country's first ever default on its sovereign debt.
Diab says it is impossible to pay creditors at a time when his own country faces so many struggles.
"How can we pay creditors outside while Lebanese can't get their money from their bank accounts? How can we pay creditors while hospitals have a shortage of medical supplies? How can we pay to the creditors while there are people on the streets who can't afford to buy bread?" he said.
Lebanon's debt is now equal to 170 percent its GDP (gross domestic product), which the president says is more than the country can currently "bear."
Diab's announcement follows months of anti-government protests, partly motivated by Lebanon's response to their growing economic crisis and crumbling infrastructure. Violent protests broke out in the streets in October after a new tax on the Facebook-owned WhatsApp messaging service was announced. Protests led former Prime Minister Saad Hariri to announce his resignation from office, admitting he had reached a "dead end" in dealing with Lebanon's crises.
Diab, who became prime minister only in January after being appointed by President Michel Aoun, says "corruption" has "eaten" the state and crippled his country's economy.
"Corruption was initially shy, then it became bold, and then it became rude, until it became immoral, a major part of the components of the state, power, and society," he tweeted on Saturday.