Venezuela has called its creditors to a debt-restructuring meeting in a week’s time but made a show of servicing loans owed by its state oil company. This follows further downgradings by two credit-rating agencies.
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Vice President Tareck El Aissami sought to reassure creditors and Venezuelans via television, saying Caracas had begun to pay out $1.2 million (1 million euros) to service debts of its state oil company PDVSA.
The nation led by controversial President Nicolas Madura, which ran up massive debts before global oil prices slumped, is estimated to owe $120 billion despite sitting on massive oil reserves.
Rating agency Standard and Poor's cut Venezuela's long-term foreign currency rating to "CC" on Friday. Fellow agency Fitch lowered Venezuela's long-term debt rating to "C."
The restructuring talks were scheduled for November 13, said Aissami, one of several Venezuelan officials sanctioned by the USA for alleged ties to drug trafficking.
El Aissami said those talks would proceed despite what he called "imperialist sanctions" – a reference to fresh US sanctions imposed in August to restrict trading in new dollar-bonds.
Chunks of Venezuela's debt are held by China and Russia, to be paid off in oil. A default could see investors lay claim to PDVSA assets, including tankers, to offset $45 billion owed by the state oil concern.
Venezuela: Crushing burden of debt
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Struggling to find basics
Scarcity of cash, coupled with triple-digit inflation, has left many Venezuelans struggling to obtain basic groceries.
An analyst at the London-based HIS Markit, Diego Moya-Ocampos, said Venezuela's options to keep up with its debt payments were "shrinking rapidly.”
Although, since 2014, Venezuela has paid nearly $72 billion in principal and interest payments, it is estimated to hold less that $10 billion in foreign currency reserves.
On Friday, the International Monetary Fund (IMF) sanctioned Venezuela for not providing economic data as required of all its 189 member states.
Opposition lawmaker Stalin Gonzalez accused the Maduro government of mortgaging "the future of Venezuelans."
The news agency AFP meanwhile announced the release of jailed opposition figurehead and lawyer Yon Goicoechea and a local mayor Delson Guarate, citing another opposition deputy Juan Andres Mejia.
In March 2017, violent protests erupted across the country in response to a Supreme Court decision to strip the legislative branch of its powers. Amid an international outcry, President Nicolas Maduro reversed the decision, but it was too late. Thousands continued to take to the streets, calling for new elections. More than 100 people were killed in clashes with security forces.
Image: Getty Images/AFP/J. Barreto
Hunger, a growing problem
The violence added to the ongoing economic and political crisis in Venezuela. Many Venezuelans spend more than 30 hours a week waiting in lines to shop, and are often confronted with empty shelves when they finally enter a store. President Maduro blames the crisis on US price speculation. The opposition, however, accuses the Socialist government of economic mismanagement.
Image: picture-alliance/AA/C. Becerra
Health care in crisis
The crisis has even affected health care in the oil-rich nation. Venezuelans often head to Colombia to collect medical supplies to send home, as seen in this picture. Hospitals across Venezuela have compared conditions to those seen only in war zones. As patient deaths rise, health officials have sounded the alarm on the rise of malaria and dengue fever.
Image: picture alliance/dpa/M.Duenas Castaneda
Power grab
By July 2017, Venezuela's pro-government Constituent Assembly was established. For observers, it had all the hallmarks of a power grab. The new body adopted the authority to pass legislation on a range of issues, effectively taking away the powers of Venezuela's elected congress, which was under the opposition's control. The move drew wide international condemnation.
Image: picture-alliance/dpa/P. Miraflores
The West sanctions
In response to the political crisis, the United States and European Union imposed a series of sanctions against ruling officials. The US blacklisted members of the Constituent Assembly and froze all of Maduro's assets that are subject to US jurisdiction. The EU banned arms sales to the country.
Image: picture-alliance/dpa/AFP/T. Schwarz
Government victorious in regional elections
In October 2017, Venezuela held two votes: regional elections and elections for governors, which were long overdue. The opposition boycotted the vote, but then split, as some candidates and small parties chose to participate. This caused a deep rift within Maduro's opponents. The government went on to sweep the vote, which detractors say was unfair and heavily favored the regime.
Image: picture-alliance/AP Photo/A. Cubillos
Debt default
In November 2017, the oil-rich, cash-poor nation faced its day of reckoning. Credit ratings agencies declared Venezuela and its state-run oil company in "selective default." But Russia offered to restructure the South American country's debt to ensure Caracas pays its other creditors. US and EU sanctions, however, limited the chance of an agreement.
Image: picture-alliance/AP Photo/A. Cubillos
Presidential elections scheduled
The National Assembly announced in January 2018 that it would grant Maduro's call for snap presidential elections. The electoral authority, CNE, held the elections on May 20. The EU, the US and 14 Latin American nations warned that they would not recognize the results. The mainstream MUD opposition alliance boycotted the vote, leaving only one possible outcome.
Image: Getty Images/AFP/F. Parra
Maduro wins ...
Maduro was re-elected to a second six-year term with about 68 percent of the vote. Turnout was only 46 percent, according to electoral authorities. However, the MUD opposition alliance put turnout at less than 30 percent. The Organization of American States (OAS) called the elections neither free nor fair.
Image: picture-alliance/AP Photo/A. Cubillos
... Guaido assumes power
But weeks into the new year, the situation took a drastic turn. On January 23, 2019, parliament president Juan Guaido declared himself interim president of Venezuela — a move that was quickly recognized by US President Donald Trump. Maduro called it a US-backed "coup." Days later, the US sanctioned Venezuela's state oil firm, while Guaido staked his claim on the country's foreign assets.