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Venezuela seeks to restructure debt

November 3, 2017

President Maduro has said that refinacing the country's hefty foreign debts is the only way to circumvent the effect of crippling US sanctions. He did however order the payment of one last major bond in full.

Venezuela Präsident Nicolas Maduro
Image: picture-alliance/dpa/Presidencia de Venezuela

The government of Venezuela announced on Thursday that it will restructure its foreign debt as the socialist country's economy lies on the brink of collapse. President Nicolas Maduro said that this plan was the only way to combat the consequences of US financial sanctions, which he has blamed for Venezuela's woes.

"I decree a refinancing and a restructuring of all external debt and all of Venezuela's payments," Maduro said in a speech broadcast across the nation.

At the same time, Maduro also ordered state-run oil firm PDVSA to make one last $1.2 billion (€1 billion) bond payment in full. This move could be seen as the president trying to avoid a nasty battle with Wall Street.

The announcement came one day after Maduro unveiled the new 100,000 bolivar bill, the largest bank note ever issued in the country's history – amid inflation that has reached catastrophic proportions. Until 2016, the country's largest note was for just 100 bolivars.

Venezuela's economy has shrunk by more than 35 percent since 2014, as falling oil prices and the financial policies of both Maduro and his predecessor Hugo Chavez have left many Venezuelans without regular access to medicine and other necessities.

The crisis boiled over into a series of deadly protests throughout the spring and summer, particularly ahead of a controversial restructuring of the country's legislature that saw opposition voices forced out in favor of pro-socialist elements.

es/gsw (AP, Reuters)