“We will not accept submitting to [imperialist] tools … meaning we do not accept submitting to the International Monetary Fund to manage the crisis,” Hezbollah deputy leader Sheikh Naim Qassem said. “Yes, there is nothing to prevent consultations [with the IMF], and this is what the Lebanese government is doing,” he added.
Iran-backed Hezbollah is one of the main parties that threw its support behind the new Beirut government, which has asked for technical but not financial assistance from the IMF. A team of IMF experts arrived in Beirut last week at the government’s request to offer technical support.
Facing a huge public debt burden and an acute liquidity crisis, the Lebanese state appointed international investment and law firms as its financial and legal advisers on a widely expected restructuring of its sovereign debt.
One of the world’s most heavily indebted countries, Lebanon is tasked with deciding how to handle forthcoming maturities of sovereign debt including a $1.2bn Eurobond due on March 9.
Parliament Speaker Nabih Berri, a Hezbollah ally and one of Lebanon’s most influential figures, last week echoed Qassem’s view, saying Lebanon could not surrender itself to the IMF because the nation could not bear the IMF’s conditions.
The government gave approval for US asset management company Lazard to act as Lebanon’s financial adviser and law firm Cleary Gottlieb Steen & Hamilton LLP to act as its legal adviser on the debt restructuring. Ratings agencies and investors expect the debt restructuring to happen.
Lazard has previously advised on some of the world’s largest sovereign debt restructurings including Argentina, Greece and Ukraine. Lazard Freres, a French subsidiary of Lazard, was one of the firms that advised Argentina in overhauling its debt after it defaulted on some $100bn loans during its crisis in 2002.