axis
Fair Use Notice
  Axis Mission
 About us
  Letters/Articles to Editor
Article Submissions
RSS Feed


Step by step. How to fabricate news about the “default” in Venezuela? Printer friendly page Print This
By La Iguana TV
Translated from Spanish and Edited by Arturo Rosales – Axis of Logic
Thursday, Nov 16, 2017

The media fabricated ‘default’ comes before the real one. The stage is slowly being set with economic sanctions; psychological pressure on Venezuelan bondholders and a media campaign that blows out of all proportion routine financial transactions.

Last Sunday the Venezuelan President Nicolas Maduro said that the "'default' will never come to Venezuela" because the South American country "will always have a clear strategy" aimed at the renegotiation and restructuring of debt – as reported by the Spanish daily El Mundo. .

However, just a day later, dawn broke in Venezuela with the news that the U.S. Rating Agency, Standard & Poor's (S & P), downgraded the country’s CC rating (very vulnerable) to "selective default" due to non-payment of 200 million dollars of the coupon on its bonds 2019 and 2024 within the 30-day grace period, according to a report in the Venezuelan daily El Universal.

So why did S & P jump the gun with a “selective default” classification when for a country to be declared in default, that country must also expressly declare that it accepts that it is insolvent and would not be able to repay its commitments. This is the usual mechanism and such an acceptance has not been declared by or in the case of Venezuela. All the economic spokespeople of Venezuela indicate that the country is paying and will continue to pay its commitments.

But such headlines make good reading for a “media default” and good reading in newspapers such as the Financial Times that, as a world leader in its field, should know better than talk about a “default” when officially this cannot happen without Venezuela declaring itself insolvent.

Let us not forget that Standard & Poors is one of the international Rating Agencies that has Lehmann Bros at the highest AAA rating in September 2008 – one day before Lehmann collapsed and almost took the whole world financial system down with it. So much for the credibility and expertise of S&P if you want to look at it objectively and there is little doubt that this arch-capitalist agency is at the beck and call of the US Treasury Department that is hell bent on trying to force Venezuela into a debt default to contribute to the US Administration’s plans of ousting President Maduro and refounding a newly compliant Venezuela as the “US gas station on the northern cost of South America”.

On Monday, a group of bondholders of Venezuelan debt from the US, Panama, United Kingdom, Portugal, Colombia, Chile, Argentina, Japan and Germany met in Caracas with the Venezuelan Government as part of the first approach for the renegotiation and restructuring proposed by Maduro.

The Venezuelan authorities described this meeting as "highly positive" and "very auspicious", in a statement in which it was recalled that in the last 36 months the South American country had canceled 73.359 billion dollars in capital and interest payments.

A pleasant 'atmosphere' for the meeting
Last Friday, a new list of sanctioned officials emerged from the U.S. Treasury Department for Caracas. In this group, which is made up of nearly 20 members of the government, including President Maduro, came the warning: "Americans should be cautious in their relations with the Venezuelan government," added the statement from Washington.

It demanding they did not involved in "transactions, agreements, in a manner directly or indirectly" with the officials named on the list of the Treasury Department under penalty of fines of up to 10 million dollars and imprisonment for a maximum 30 years.

In that atmosphere that was also burdened with the sanctions agreed by the Council of the European Union bondholders met to arrange the refinancing or restructuring of the Venezuelan debt in the White Palace, a building located opposite Miraflores Palce which is the seat of government in the capital city.

Are there non-payments or not?
The economist Luis Enrique Gavazut, Member of the Economic Observatory of the Presidency, told RT that the Standard & Poor's rating is a "premature declaration", based on the fact that Venezuela did not pay 200 million dollars.

"It is nothing but a payment of interest. It is pretty mundane and of low magnitude," says Gavazut, if compared with the cancellation of the external debt announced Tuesday by Communications Minister Jorge Rodríguez.

In his opinion, both amounts should be compared: 200 million dollars, with the interests of the "magnitude" of an external debt that amounts - according to the figures of the high government - to about 150 billion dollars at this time.

This announcement is part of the other two payments for PDVSA bonds made by Venezuela weeks ago, amounting to almost 2 billion dollars and that "were the last that could be made under these conditions", before announcing the refinancing and restructuring of the debt.

For Francisco Gonzalez, international analyst interviewed by RT, the media created the  "'default'.. "The media publish that information to generate fear in the private investors", he said, because that can discourage them from buying bonds and investing in Venezuelan debt.

"They want to cut off foreign investment in the country," he pointed out. Gonzalez also exposed that this campaign seeks to discredit the South American country and crate the opinion that Venezuela is not in a position to meet its financial commitments.

In the opinion of Professor González, they are seeking to asphyxiate the economy and isolate Venezuela politically "until you have no credit possibilities and drown financially little by little”. He also explained that although the issue of possible non-payment has been spread by the US and European media, a “default” is this case does not correspond to the policy of multilateral agencies.

The fact is that a 200 million dollar interest payment may have arrived late to some bondholders but was this really a late payment or the international banks dawdling on the transfer to paint Venezuela in a bad light? This has been done in the past and Citibank even made a statement that “Venezuela had paid late” when the funds were held up in the system.

Let us not forget that Standard & Poors, Moodys and Fitch rating services are financed by the banks and therefore have no real independence. By extension the banks are beholden to orders from the US Treasury Department and will apply sanctions and blocking measures if required to do so. All are the politico-financial arm of the US administration and its perceived global financial hegemony based on a fiat currency.

Gonzalez agreed with Gavazut that the objective is to "generate fear in private investors" not to buy bonds, not to participate in the renegotiation of the debt and finally not to invest.

 

Original Spanish language URL

 

Translated from Spanish and Edited by Arturo Rosales – Axis of Logic



© Translation copyright 2017 by AxisofLogic.com

This material is available for republication as long as reprints include verbatim copy of the article in its entirety, respecting its integrity. Reprints must cite the author and Axis of Logic as the original source including a "live link" to the article. Thank you!


 
Printer friendly page Print This
If you appreciated this article, please consider making a donation to Axis of Logic. We do not use commercial advertising or corporate funding. We depend solely upon you, the reader, to continue providing quality news and opinion on world affairs.Donate here




World News
AxisofLogic.com© 2003-2015
Fair Use Notice  |   Axis Mission  |  About us  |   Letters/Articles to Editor  | Article Submissions |   Subscribe to Ezine   | RSS Feed  |