BEIRUT (Reuters) – Lebanon’s top leadership opposes repaying the country’s sovereign debt, the presidency said on Saturday, indicating the the heavily indebted state is heading towards a default as it grapples with a major financial crisis.

A default on Lebanon’s foreign currency debt will mark a new phase in the crisis that has hammered Lebanon’s economy since October, slicing around 40% off the value of the local currency and leading banks to deny savers full access to deposits.

Lebanon has a $1.2 billion Eurobond due on March 9, part of a wider portfolio of some $31 billion in dollar bonds that sources told Reuters on Friday the government would seek to restructure in negotiations with its creditors.

Prime Minister Hassan Diab will address the Eurobond issue and Lebanon’s wider economic crisis in a speech to the nation at 6:30 p.m. (1630 GMT).

The announcement from the presidency followed a meeting attended by the president, prime minister, parliament speaker, central bank governor and head of the country’s banking association.

“The attendees decided unanimously to stand by the government in any choice it makes in terms of managing the debt, except paying the debt maturities,” the presidency said in a statement after the meeting.

Sources told Reuters on Friday Lebanon was set to announce on Saturday that it cannot make upcoming dollar bond payments and wants to restructure $31 billion of foreign currency debt unless a last-minute deal with creditors could be found to avoid a disorderly default.

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• Lebanese leaders oppose repaying debt maturities: presidency

Lebanon hired U.S. investment bank Lazard (LAZ.N) and law firm Cleary Gottlieb Steen & Hamilton LLP last week as advisers on the widely expected restructuring.

The financial crisis came to a head last year as capital inflows slowed and protests erupted over state corruption and bad governance.

The import-dependent economy has shed jobs and inflation has risen as the pound has slumped, adding to grievances that have fuelled protests.

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