Ecuador Declares Foreign Debt Illegitimate and Illegal

[Guest]

A special debt audit commission released a report charging that much of Ecuador's foreign debt was illegitimate or illegal.

The commission found that usurious interest rates were applied for many bonds and that past Ecuadorian governments illegally took other loans on.

Debt restructurings consistently forced Ecuador to take on more foreign debt to pay outstanding debt, and often at much higher interest rates.

The commission also charged that the U.S. Federal Reserve's late 1970's interest rate hikes constituted a "unilateral" increase in global rates, compounding Ecuador's indebtedness...

28/11 - Ecuador Declares Foreign Debt Illegitimate and Illegal

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[tsetsefly]

Re: Ecuador Declares Foreign Debt Illegitimate and Illegal

so they are basically defaulting on their debt???

[*T*]

Re: Ecuador Declares Foreign Debt Illegitimate and Illegal

I can see the argument that borrowing done under a military junta is illegitimate where the country have no previous debts. I am curious what others here think.

[grizam303]

Re: Ecuador Declares Foreign Debt Illegitimate and Illegal

I think we should do the same with the funding for our illegal wars.

[tsetsefly]

Re: Ecuador Declares Foreign Debt Illegitimate and Illegal

I can see the argument that borrowing done under a military junta is illegitimate where the country have no previous debts. I am curious what others here think.

I could see the argument, still, what will this do for the image of the country? or confidence of investors?

[Guest]

Re: Ecuador Declares Foreign Debt Illegitimate and Illegal

I could see the argument, still, what will this do for the image of the country?

The first country in the world to agree to recognise the Rights of Nature in its constitution:

Ecuador’s New Constitution - Nature Has Rights

The new constitution introduces a raft of changes proposed by Ecuador’s President, Rafael Correa that include enhancing his chances of re-election for a further two possible terms, a ban on foreign military bases (which will mean that the US will have to abandon a military base in the coastal city of Manta), a guarantee of universal health care and free education to post-secondary level. Most surprising is the Chapter that gives nature “the right to exist, persist, maintain and regenerate its vital cycles, structure, foundations and its processes in evolution.”

[tsetsefly]

Re: Ecuador Declares Foreign Debt Illegitimate and Illegal

I could see the argument, still, what will this do for the image of the country?

The first country in the world to agree to recognise the Rights of Nature in its constitution:

Ecuador’s New Constitution - Nature Has Rights

The new constitution introduces a raft of changes proposed by Ecuador’s President, Rafael Correa that include enhancing his chances of re-election for a further two possible terms, a ban on foreign military bases (which will mean that the US will have to abandon a military base in the coastal city of Manta), a guarantee of universal health care and free education to post-secondary level. Most surprising is the Chapter that gives nature “the right to exist, persist, maintain and regenerate its vital cycles, structure, foundations and its processes in evolution.”

and???? Correa is a joke of a president btw, a buffoon...

[metalman]

Re: Ecuador Declares Foreign Debt Illegitimate and Illegal

and???? Correa is a joke of a president btw, a buffoon...

an economist as president? how can that be good? defaulting on illegitimate debt taken on by military dictatorships? following in argentina's path.

then again, so are we.

[dbarberic]

Re: Ecuador Declares Foreign Debt Illegitimate and Illegal

Can I declair my mortgage illegitimate and illegal?

[oddlots]

Re: Ecuador Declares Foreign Debt Illegitimate and Illegal

For anyone trying to figure out Latin America investment wise I highly recommend Inca Kola news written under the pen name of Otto Rock. From what I've seen Correa seems like a very smart politician expert at playing both sides of an issue to get his way. I doubt very much that Ecuador will default but Correa will use the threat to re-negotiate. He's been doing the same thing with foreign oil interests (Repsol) and mining interests. He's pro-development but has to appease the greens within his party. That said he can be very scathing of environmentalist utopians calling them "infantile" I believe at one point.

Inca Kola: http://www.incakolanews.blogspot.com/

[Guest]

Re: Ecuador Declares Foreign Debt Illegitimate and Illegal

I have been doing some research on buying a small property in Ecuador just in the past few weeks. Very interesting development! Internal interest rates should rise sharply in response to this debt repudiation earthquake, property values will temporarily take it on the chin. I see opportunity here. IMO Ecuador RE has excellent longer term prospects. Unbelievably cheap BTW. Correa is no fool.

[metalman]

Re: Ecuador Declares Foreign Debt Illegitimate and Illegal

Can I declair my mortgage illegitimate and illegal?

you bet! if the guy holding it is in germany.

[grizam303]

Re: Ecuador Declares Foreign Debt Illegitimate and Illegal

If the Federal Reserve is declared to have been illegal, could that open the door to repudiate debts incurred to or because of the Federal Reserve?

That'd be somethin', huh.

[D-Mack]

Re: Ecuador Declares Foreign Debt Illegitimate and Illegal

A country today like Ecuador owes over fifty percent of its national budget just to pay down its debt. And it really can’t do it. So, we literally have them over a barrel. So, when we want more oil, we go to Ecuador and say, “Look, you’re not able to repay your debts, therefore give our oil companies your Amazon rain forest, which are filled with oil.” And today we’re going in and destroying Amazonian rain forests, forcing Ecuador to give them to us because they’ve accumulated all this debt. So we make this big loan, most of it comes back to the United States, the country is left with the debt plus lots of interest, and they basically become our servants, our slaves. It’s an empire. There’s no two ways about it. It’s a huge empire. It’s been extremely successful.
http://www.democracynow.org/2004/11/...onomic_hit_man

From an 04 interview