Internacional

EU imposes economic sanctions as Caracas on brink of collapse — Venezuela crisis

EU imposes economic sanctions as Caracas on brink of collapse — Venezuela crisis

The UN Security Council has scheduled an important meeting with OAS Secretary General Luis Almagro and Venezuelan civil society to discuss the humanitarian crisis.

Bonds issued by Venezuela and state oil company PDVSA rallied on Friday as efforts to keep current on obligations fueled optimism ahead of the meeting. The new targets included electoral officials and also the head of the government's main food distribution program. With encouragement from Florida Senator Marco Rubio and other Republicans, Trump has been trying to help topple the elected government of Venezuela. Invited bondholders weren't given a time and location of the meeting until Saturday afternoon, when it was announced on Twitter. "(We) will always have a clear strategy and right now that strategy is to renegotiate and refinance the foreign debt".

AQ: Where does Venezuela's debt situation stand? Such a violation can be penalized by 30 years in prison and up to $10 million dollars in fines for businesses. A grace period expired last week on a bond payment by the state electricity utility Electricidad de Caracas, and there was confusion over whether that payment was made.

One thing that seems to have hurt the opposition was their support for the Trump sanctions. Again, the implications of this are unclear.

The economic implosion has already taken a brutal toll on Venezuelans. Additionally, the government tapped Vice President Tareck El Aissami to lead the negotiation, with the finance minister and PDVSA CFO Simon Zerpa as the leading official present. But bondholders appeared unconcerned at the delay, which was due in part to increased bank vigilance of Venezuela transactions.

But the strategy could backfire if met with aggressive lawsuits.

The sanctions will include a weapons ban to prevent the sale of military equipment that can be used for repression or surveillance of Venezuelans, as the regime continues to use excessive force to contain protesters and persecute political dissidents and opposition leaders.

Venezuelan President Nicolas Maduro said on Sunday the country would never default on its debt, a day before debt talks with creditors that will be overseen by two officials under sanction by the United States.

The Caracas government said in a statement: "The European institutions show their lamentable and shameful subordination to the US government". In a debt restructuring, interest and principal payments are postponed into the future, and the creditors receive new bonds ― which the sanctions explicitly prohibit.

AQ: The opposition has criticized the Maduro government for prioritizing debt payments when there's a shortage of food and medicine. Why should people who aren't bondholders care?

However, he said it would be the last time it paid creditors in full, and moving forward Venezuela wanted some sort of debt relief. If it becomes incapable of accessing, exploring and producing this resource, the world itself will be hampered because oil prices will go up and development will become more expensive. For example, last week the government had to scramble to pay off $1.2 billion in principal for PDVSA bonds, to avoid default.