Public finances – Slave to a ravenous debt

  Lebanon’s outstanding debt reached $51.5 billion at the end of the first quarter, while this year’s budget — if endorsed by Parliament — has slated $4.3 billion for debt servicing, accounting for as much as one third of overall spending. The stock of debt, currently estimated at 147 percent of gross domestic product, towers over the economy and only looks set to grow, while the biggest holders of the debt, Lebanese commercial banks, appear to be largely unfazed as they eye their mounting credits. Lebanese commercial banks — the tycoons Commercial banks represent the biggest demand for sovereign paper. They are the main subscribers of the $30 billion outstanding debt denominated in Lebanese lira. Their share of total subscriptions to treasury bills (T-bills) and notes in lira in the first quarter of 2010 stands at 65 percent, according to the Ministry of Finance’s quarterly bulletin, followed by public institutions