Lebanon preparing public debt reform plan, assures on Eurobonds-finance minister

Lebanon is studying ways to manage its public debt and its structure as part of plans for public finance reform, the finance minister told Reuters on Thursday, after he was cited saying the plan included restructuring of public debt.
 
Ali Hassan Khalil's remarks to al-Akhbar newspaper about debt restructuring sparked a heavy sell-off in Lebanon's dollar-denominated debt. Some issues dropped more than 2 cents in the dollar to trade at their weakest in weeks.
 
Khalil told the paper his ministry was "preparing a financial correction plan including restructuring of public debt" which was needed to spare Lebanon "dramatic developments".
 
"The public debt cannot continue in this way," he said.Details of the plan had not been revealed to anyone, he added.
 
Lebanon has one of the largest public debt-to-GDP ratio in the world at around 150 percent and has suffered from years of low economic growth.
 
Asked about the report, Khalil told Reuters the plan was "part of a reform project" for the public finances, starting with measures set out at a Paris donors' conference last year where Lebanon vowed to bring down its deficit.
 
"It is a voluntary financial correction plan being prepared in the ministry to avoid anything worse happening," he said. No steps had yet been taken and the aim was to have the plan ready for when a new government is formed, he said.
 
He told Reuters Lebanon was committed to its Eurobond issuances and those that hold them, and that it would not violate any of their terms.
 
He said "ideas for the management of the debt and its structure are still under study". He did not refer to debt restructuring.
          

 

 

 

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