Lebanese Prime Minister Hassan Diab is set to address the Lebanese people at 6:30pm tomorrow, only two days before the country’s Eurobonds mature on 9 March. Though the prime minister is expected to announce a financial rescue plan, which, International Monetary Fund (IMF) officials hinted could involve restructuring public debt, Lebanon is being held hostage by an intransigent Hezbollah.
Several economists have called for an IMF bailout, and Diab’s statement, which announced on Wednesday that the country can no longer protect Lebanese people and provide them a “decent lifestyle”, indicates that the prime minister might just agree. But, crucially, Hezbollah does not.
Though the Iranian-backed Shia militia boasts only two ministries in the current cabinet, Diab’s government is backed by the group, and its allies, in the March 8 Alliance – a traditionally pro-Syrian bloc of political parties. While Hezbollah gave approval to the government for seeking “technical assistance” from the IMF, the issue of a bailout has been presented as a red line.