The Mesa de la Unidad Democratica (MUD) confirmed today that it will not be attending a dialogue session tomorrow in the Dominican Republic with representatives from the Maduro regime. The announcement that the two sides would sit down for talks again was made last week, and took the country by surprise.

Today’s announcement came from MUD representative Luis Florido, who made clear that the reason for the opposition’s pull-out was that the ruling PSUV party would not allow international observers to talk part in the talks. Florido told reporters this evening:

What have we seen? That the [PSUV] has not invited the foreign ministers as of today, which means that we cannot have an international negotiation process as long as the foreign ministers are not invited.

The MUD hoped to begin the talks tomorrow in the Dominican Republic with the assistance of foreign ministers from Mexico, Chile, Paraguay, Bolivia and Nicaragua, whom they hoped would help to keep the PSUV accountable. However, the PSUV rejected the idea of having any international observers present at the talks out of hand.

Florido also said:

A process of international negotiation requires the presence of the countries that are going to be a part of this group: without them, none of this is possible.

S&P Downgrades Venezuela Sovereign Debt to “Selective Default”

The Standard & Poor’s rating agency announced late last night that Venezuela has defaulted on its debt obligations after failing to make payments worth $200 million on bonds due in 2019 and 2024. The agency downgraded the country’s sovereign debt to “selective default“, which means that the country is facing such financial difficulties that it has chosen to not make a payment, but that it is not yet bankrupt and could make future payments.

S&P accompanied the downgrade with a prediction that there is a 50% chance that the Venezuelan government will default again “within the next three months”.

The downgrade today from S&P follows a similar move by Fitch Ratings, which downgraded the state-owned PDVSA oil firm to “restricted default” yesterday. The rating means that the debtor has failed to make a payment, but it is not yet bankrupt and is otherwise operation normally.

Today’s downgrade from S&P is yet another piece in a growing mountain of evidence that the Maduro regime may be driving Venezuela to bankruptcy.

The downgrade follows a highly-touted debt restructuring meeting with investors in Caracas yesterday that lasted a mere 30 minutes and contained no practical information whatsoever. The Maduro regime called yesterday’s investor meeting “an absolute success”.

The downgrade note by S&P points out that the Venezuelan government is already late on a further $420 million in bond payments, but that it is still within the 30-day payment grace period for each one. The overdue payments are for bonds due in 2025, 2023, 2026, and 2028.

The agency warns that it could lower the country’s rating to “default” if it does not make the four payments within the 30-day grace period.

The default events outlined by S&P and Fitch yesterday are already causing ripples in the trade of Venezuelan bonds, as the Luxembourg Stock Exchange announced today that it was halting the trading of Venezuelan 2019 and 2024 sovereign bonds until tomorrow.

Brazil to Ask Paris Club for Assistance on Venezuela Debt

The government of Brazil announced today that it would ask the Paris Club for assistance as it seeks to recover $262 million in loans to the Venezuelan government. Brazil was motivated to make the move following Maduro’s announcement on November 2 that he was “declaring” the restructuring of all of the country’s foreign debt.

Brazil should have received the money in September. On top of that total, Venezuela is due to pay another $270 million in loans back to Brazil in January.

The Paris Club is an international organization of creditors who work together to help debtor countries maintain their obligations in periods of financial difficulty.

HRW: Venezuela’s “Democratic Facade” Stripped Away

Daniel Wilkinson, the adjunct executive director for the Americas at Human Rights Watch, spoke on the Venezuelan crisis at an event in Guatemala City yesterday, and said that the Maduro regime’s “democratic facade” had collapsed to reveal an authoritarian dictatorship.

Calling the human rights situation in the country “really desperate”, Wilkinson lamented the fact that while international pressure on the Maduro regime has been mounting, calls for change have been largely ineffective.

Wilkinson summarized the situation in the country over the last few months in the following way:

There is still a humanitarian and human rights crisis in the country, which hasn’t improved at all (…) the situation has not improved.

Questions/Comments? E-mail me: invenezuelablog@gmail.com

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One thought on “11.14.17: Pull Out

  1. Pingback: 11.16.17: Mounting Evidence | In Venezuela

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