Russian Finance Minister Anton Siluanov confirmed today an agreement had been reached on the restructuring of $3 billion in debt owed by Caracas to Moscow. While it is not yet clear what the terms of the agreement are, but Bloomberg is reporting that it may involve allowing Venezuela to move the bulk of its payments to a later date.
Minister Siluanov made the announcement by saying:
The Venezuelans have confirmed the terms we’d agreed on, and that’s why the process will move into the concluding phase.
Venezuela is teetering on the bring of default due in part to low international oil prices and gross economic mismanagement. The Maduro regime owes approximately $52 billion to private creditors, and the country’s dwindling foreign reserves are currently sitting at $9.7 billion.
Richard Segal, a financial expert with Manulife Asset Management, told Bloomberg that today’s news is not surprising, since Russia and Venezuela have a relatively close relationship and Russian investors have “significant long-term partnership interests” in Venezuela.
Maduro announced last week that he was “declaring” the restructuring of all of the country’s foreign debt. The announcement caused a great deal of confusion among commentators, who called attention to the fact that debt restructuring is not something that can simply be declared because it is the product of complex negotiations among multiple parties, and because Maduro named vice president Tareck El Aissami as the head of the restructuring effort.
Because El Aissami is the target of financial sanctions by the United States and Canada, bond holders from those countries are legally prohibited from engaging in any kind of business with the vice president.
The United States Department of the Treasury clarified today that while U.S. citizens are not banned from attending meetings with Venezuelan government officials regarding debt restructuring, they should be “cautious” so as to not directly or indirectly “engage in transactions or dealings” with sanctioned individuals.
Monica de Bolle, a senior fellow at the Peterson Institute for International Economics, was blunt with her assessment of the situation, telling Reuters:
Looking at this right now U.S. bondholders will probably not be able to participate in the restructuring.
EU to Slap Sanctions on Venezuela
The European Union is on the road to become the the third and largest entity to sanction Venezuela today, following moves by the governments of the United States and Canada earlier this year.
The exact shape and target of the sanctions is not yet known, because the matter has been agreed to only in principle during a meeting of the EU’s foreign ministers earlier today. The actual sanctions could be announced as early as Monday.
The sanctions are expected to include an arms embargo, as well as an embargo on any kind of equipment that might be used to repress dissent and/or monitor electronic communications. The sanctions are also likely to include “the legal basis” for the creating of a list of regime officials deemed to be responsible for the Venezuelan crisis. These officials would then be banned from travelling to the European Union, and their assets there would be frozen.
Constituent Assembly Approves Hate Speech Law
The Constituent Assembly voted today to approve a new hate speech law that will see offenders sentenced to as many as 20 years in prison. The title of the law was “Law Against Hatred and for Peaceful Co-Existence and Tolerance”.
The law contains tough provisions for violators. Article 20 of the law reads:
Whoever publicly (…) incites hatred, discrimination or violence against a person or a group of persons due to their real or presumed belonging to a social, ethnic, religious or political group (…) will be sanctioned with prison for 10 to 20 years.
The law also places financial sanctions on the owners of media outlets that are found to broadcast messages “that constitute propaganda in favour of war, [or that encourage] national, racial, religious, political or any other kind of hatred.”
Critics of the law fear that it will be used as a blunt weapon against opponents of the Maduro dictatorship. The law’s ambiguous language as well as the fact that it specifies political affiliation as a protected group means that the law will almost certainly be used to prosecute individuals who speak out against the regime.
Falcon says MUD is Dead, Hints at Presidential Run
Henri Falcon, an opposition figure and former governor of Lara state, spoke in an interview this afternoon in which he stated his belief that the Mesa de la Unidad Democratica (MUD) “has been extinguished”, and that the country’s opposition forces must now forge a new alliance against the Maduro regime.
Speaking on the state of the Venezuelan opposition, Falcon said:
People don’t want more [in]fighting or confrontations, or division. People want more unity, and that’s what we the spokespeople from the now-defunct Mesa de la Unidad Democratica believe. The [MUD] played its role, and [we now have to] generate new alliances, new agreements and a new platform that truly sends out clear messages to face the crisis that the country is living and that could lead us to collapse.
The MUD was created in 2008 with the goal of building a unified opposition front against Hugo Chavez and the ruling PSUV party. It enjoyed its greatest success when it managed to defeat the PSUV in the 2015 parliamentary elections, but was unable to cement its political gains. A set of back-to-back catastrophic defeats in the July 31 Constituent Assembly election and the October 15 gubernatorial elections appear to have signaled the end of the coalition.
During the same interview, Falcon hinted at a presidential run in the elections that are supposed to take place new year. Falcon said that unlike other opposition leaders who have shunned elections in the past, he has always advocated for them and is therefore on good standing to participate in a future election at least on an ideological level. Falcon said:
We think that we have the moral [standing] to [run for president] because we have embraced democratic principles through the electoral route and the necessity to build positions in order to reconcile the country.
Prior to heading the Avanzada Progresista opposition party, Falcon was a high profile member of the PSUV party and its predecessor, the Movimiento V Republica.
Deputy Claims Goiocoechea Released on Condition that He Run for Mayor
National Assembly deputy Alfonso Marquina spoke in a television interview today in which he said that Yon Goiocoechea was released by the regime after more than one year in captivity on the condition that he participate in the upcoming mayoral elections.
Marquina also suggested that other persecuted opposition figures like Delson Guarate and Manuel Rosales have been allowed to go free in exchange for becoming part of an official opposition that plays by the regime’s rules.
I think that unfortunately they are not free. They are more imprisoned today than they were before, because their freedom depending on them participating in an electoral process with the intention of giving the government legitimacy [despite the electoral] fraud that we Venezuelans have been witnessing.
Goiocoechea was released on Saturday after spending more than a year in prison. He was originally accused of attempting to unleash a campaign of terror attacks in the country, but his case was dismissed by a judge. The authorities refused to release him even after the court order to do so was written. He announced his candidacy in the municipal elections for El Hatillo on Sunday.
Marquina said that Goicoechea was held in prison until he finally relented and agreed to take part in the election.
The deputy also believes that there is a larger trend at play in Goicoechea’s release, and suggested that the Maduro regime may be trying to build an official opposition: that is, a political opposition that exists only on paper to lend legitimacy to an otherwise dictatorial system. He explained:
What the government is trying to do is to somehow install in Venezuela the system that they have in Nicaragua, where we see electoral fraud but because there’s a small opposition that participates, that lends [the system] legitimacy.
Delson Guarate–another political prisoner who was released alongside Goicoechea over the weekend–has also announced that he is running for mayor in the December elections. He has denied the allegations that he was released so that he could run.
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