by reuters — A majority of Lebanese Parliament members oppose paying looming Eurobond maturities, even if that leads to default, Parliament Speaker Nabih Berri said on Wednesday. The announcement compounded doubts over whether the heavily indebted country will meet a March 9 repayment deadline. Lebanon is facing an unprecedented economic and financial crisis, which came to a head last year as capital inflows slowed and protests erupted against the ruling elite. Its next debt maturity is a $1.2bn Eurobond due on March 9.

Senior sources close to two of the main parties that back the government – the powerful Hezbollah, and Berri’s Amal Movement – told Reuters news agency that the government was expected to announce a decision not to pay on Friday or Saturday and enter negotiations with bondholders. A source close to the other main backer of the government – the Free Patriotic Movement, founded by President Michel Aoun – said such a declaration may happen unless foreign bondholders made a good offer in time. Berri, one of Lebanon’s most influential leaders, made his comments at a weekly meeting of members of Parliament. “We are with any measure the government takes apart from paying,” Ali Bazzi, a lawmaker from Berri’s parliamentary bloc, cited him as saying.

The March 2020 Eurobond gave up around half of its gains for the day after Berri’s remarks. The bond is still up around 12 percent this week at 58 cents on the dollar, according to Refinitiv data. Lebanon hired United States investment bank Lazard and law firm Cleary Gottlieb Steen & Hamilton LLP last week as advisers, ahead of a widely anticipated debt restructuring. A source close to the government said: “The government is still considering options and has not taken a decision yet. They are having meetings every day. Maybe they will find a solution between now and Saturday.” The Ministry of Finance declined to comment.

Lebanon’s long-brewing financial crisis has led to a hard currency crunch and seen the Lebanese pound lose close to 40 percent of its value since October. Lebanese banks have also imposed tight restrictions on access to deposits and transfers abroad. Hezbollah, a heavily armed Shia group backed by Iran and designated a “terrorist” group by the US, has not declared its position on the debt. Berri directed criticism at local banks that recently sold Eurobonds to foreign investors, saying they bore responsibility for diluting the local holding. Critics say this has weakened Lebanon’s position in negotiations with foreign bondholders. “If they want to restructure [the debt] without restrictions or conditions, and without any share of the amount or interest being paid, then so be it,” Bazzi quoted Berri as saying.

One of the sources close to Hezbollah and Amal said contacts between Lazard and foreign bondholders had not reached any agreement, adding that foreign investors wanted their money. “We can’t hide behind our fingers any more. We cannot pay,” the second source close to the Shia parties said. Opponents of paying say Lebanon’s dwindling foreign currency reserves represent the savings of ordinary people whose money was deposited at the central bank by commercial banks for high-interest rates.