May 2, 2019 / 5:53 PM / 3 months ago

Lebanon's Hezbollah says banks have duty to help cut cost of public debt

BEIRUT (Reuters) - The leader of Lebanon’s Hezbollah movement said on Thursday Lebanese banks had a “national and moral duty” to help the government resolve its high cost of servicing debt.

The heavily armed, Iran-backed group, which has elected representatives in parliament and is part of the ruling coalition, in February called on the government to open talks with banks to bring down the cost of servicing the debt.

“Banks have to take the initiative to participate in the solution when it comes to debt servicing and reducing interest and this is the least of their national, moral duty,” Sayyed Hassan Nasrallah said in a speech, according to the website of the pro-Hezbollah al-Manar channel.

The government said in January it was not proposing to restructure the public debt and affirmed its commitment to paying all maturing debt and interest payments at predetermined dates.

Lebanon has one of the largest debt-to-GDP ratios in the world at about 150 percent, partly accumulated through the cost of servicing existing debt. Much of the debt is held by Lebanese banks.

The government, formed in late January after months of negotiations between rival parties following an election a year ago, is working to produce a 2019 budget that the finance minister has said will include “wide reductions” in spending.

Reporting by Angus McDowall; Editing by Peter Graff

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