Berri Urges No Eurobond Payment 'Even If It Leads to Default'

Parliament Speaker Nabih Berri on Wednesday announced that “the majority of the Lebanese people and parliament are totally against paying” a $1.2 billion Eurobond debt on March 9.

“The banks, which have led us into a loss amounting to 75% of the debt, must bear the responsibility along with the foreign buyers,” Berri told lawmakers during the weekly Ain el-Tineh meeting.

“If they want a restructuring without conditions and without paying any portion of the sum so be it, or else we will support any measure taken by the government, except for payment,” Berri added.

“Once again I say: the deposits are sacred and must not be touched,” the Speaker warned.

He also stressed “the unity of the domestic stance and the opposition and the majority in the face of this crisis.”

Economists have warned that payment on time would eat away at Lebanon’s plummeting foreign currency reserves, while bankers say a default would damage the country’s reputation with lenders.

Bank of America Merill Lynch in a November report estimated that around 50 percent of Eurobonds were held by local banks, while the central bank had around 11 percent.

Foreign investors owned the remainder, or around 39 percent, it said.

But these figures may have changed, with local media reporting that local banks have recently sold a chunk of their Eurobonds to foreign lenders.