Reply To: Venezuela
Matt, Had to wait until another source arose due to foreigners are unable to use BBC iplayer. Relevant section of interview on Twitter here
"If all that's true, it would be appalling, but I have watched America impose sanctions… an appalling impact on their country" @ken4london on how Alan Johnson & Esther McVey reacted to his #bbctw film
"As we speak tonight, children in #Venezuela are starving to death" @afneil pic.twitter.com/Bl8zJfRZF7
— BBC This Week (@bbcthisweek) February 1, 2019
Livingstone certainly made a buffoon of himself by being unprepared for this interview. But there were financial sanctions imposed on Venezuela that impacted on their ability to raise credit for trading.
Executive Order 13.808, issued on August 25 of 2017, barred U.S. persons from providing new financing to the Venezuelan government or PDVSA, it stopped the country from issuing new debt or selling previously issued debt currently in its possession.
The Financial Crimes Enforcement Network (FinCen) on September 20, 2017, warning financial institutions that “all Venezuelan government agencies and bodies, including SOEs [state-owned enterprises] appear vulnerable to public corruption and money laundering” and recommending that several transactions originating from Venezuela be flagged as potentially criminal.
These had the effect of closing the door on any possibility of a Venezuelan debt restructuring. Since the sanctions impeded the nation from accessing new financing, they also impeded it from issuing new bonds in exchange of old ones.
The President of the anti-Maduro National Assembly was writing letters to international banks warning them that if they lent money to Venezuela they would be not only violating Venezuelan law but favoring a government that was recognized as dictatorial by the international community. When Goldman Sachs Asset Management purchased $2.8bn of bonds in May from the Venezuelan government through an intermediary, angry Venezuelans gathered to protest outside its New York office and the opposition vowed not to pay the bonds if it reached power. By the time that sanctions were approved in August, Venezuela had all but lost access to international financial markets. Institutions proceeded to close Venezuelan accounts, reasoning that the compliance risk of inadvertently participating in money laundering was not worth the benefit. Venezuelan payments to creditors got stuck in the payment chain, with financial institutions refusing to process wires coming from Venezuelan public sector institutions.
Crude Realities: Understanding Venezuela’s Economic Collapse
Livingstone would have been on stronger ground if he blamed deliberate economic sabotage than merely sanctions.
Again who is the side that is not willing to seek a peaceful resolution of the impasse.
The US has rejected a new initiative by Uruguay and Mexico to restart dialogue in a bid to de-escalate the political standoff in Venezuela. A senior US official said that countries would “ultimately see it is in their interests to recognize” Guaido.
Mike Pence, the US vice president, said “This is no time for dialogue. This is time for action,”
