Ecuador defaults on foreign debt

Ecuador defaults on foreign debt


http://newsimg.bbc.co.uk/media/image...376_correa.jpg Rafael Correa said he was ready to confront international lenders


Ecuador is to default officially on billions of dollars of foreign debt it considers "illegitimate", says President Rafael Correa.
Mr Correa said he had given the order not to approve a debt interest payment due on Monday, describing the international lenders as "monsters".
The president said that some of Ecuador's $10bn debt was contracted illegally by a previous administration.
It is the first debt default by a country in Latin America since 2001.
At that time, Argentina failed to repay debt in the midst of its financial meltdown.
Restructure plan
Speaking in the city of Guayaquil, Mr Correa said "as president I couldn't allow us to keep paying a debt that was obviously immoral and illegitimate", according to the AFP news agency.
"We'll present a proposal to restructure the debt in order to resolve this problem as fast as possible," added the US-trained economist and ally of left-wing Venezuelan President Hugo Chavez.
His decision follows a government audit in November which recommended that Ecuador default on almost 40% of the $10bn foreign debt, accusing former officials and bankers of profiting irresponsibly from bond deals.
The country's foreign debt amounts to about a fifth of its Gross Domestic Product, or GDP.
In the past, Mr Correa has vowed to put money he has earmarked for spending on public programmes - ahead of paying foreign debt. Correspondents say Ecuador's decision to effectively cut itself off from outside financing could lead to a budget shortfall, especially if the price of oil - the country's main revenue earner - continues to fall. Oil is Ecuador's main source of income and accounts for 40% of the national budget.



http://news.bbc.co.uk/1/hi/business/7780984.stm

Not sure what to make of this guy,he seems to stick his fingers up at the world quite a bit.

Lunatic or to be respected ?

Respected by me

Personally I reckon we should do something with our utilities - they belong to the public and noone had the right to sell them so we're taking them back, tough shit.

Long may it continue, South America is becoming a hotbed of radical left wing socialist governments who are exploiting their natural resources to actually improve the lives of their citizens instead of selling the rights to western corporations.

The US are so overstretched militarily they don't seem to have the will or means to sponsor a coup d’état in any of these countries. World power does indeed seem to be shifting, slowly, but the US is certainly on the wane.