[Marxism] Ecuador defaults on foreign debt

S. Artesian sartesian at earthlink.net
Sat Dec 13 10:37:12 MST 2008


Not the first time.  Ecuador defaulted on its Brady Bonds (!) in 1999.  And 
as a result was "punished" when in 2005 (?) creditor countries cancelled $80 
billlion of debt, Ecuador's debt was NOT included in the package.

Much of the turmoil goes back to the World Bank, which tried to prevent 
Ecuador for changing the terms of its stabilization fund from protecting 
debt payments and to funding social development.

Part of the turmoil goes back to the bilateral loan agreements between 
Ecuador and creditor countries (Spain holds the biggest part of these).  The 
loans are in essence, nothing but letters of credit, purchase agreements 
obligating Ecuador to use the loans to buy products from the creditor 
countries, to be imported with transportation from the creditor countries, 
with use, operation of the imports to be "managed" by technicians and 
consultants from the creditor countries.

But... from my reading it doesn't appear that these bi-lateral agreeements 
are the debt packages Correa defaulted against.  Ecuador is defaulting on 
its sovereign debt, its global bonds that trade in secondary markets.

Anybody have more information on this?

----- Original Message ----- 
From: "Eli Stephens" <elishastephens at hotmail.com>
To: <sartesian at earthlink.net>
Sent: Saturday, December 13, 2008 10:00 AM
Subject: [Marxism] Ecuador defaults on foreign debt







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