Brazil recalls Ecuador ambassador

by rahul | November 21, 2008 at 06:52 pm
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Ecuador and Venezuela inaugurate joint oil field at Orinoco

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In reaction to the suspension of payments on a Brazilian loan worth at least $320 million and the filling of an international arbitration, Brazil decided to recall its Ambassador to Quito for further consultations. Ecuadorean President, Rafael Correa, stated Quito would not repay the Brazilian "illegitimate" debt. Even though some the following article justified such decision on  falling oil export revenues, this is not the first time Brazil deals have been questioned in Ecuador.  

  Brazil has recalled its ambassador from Ecuador over the Andean country's suspension of payments on a Brazilian loan worth at least $320 million.  Ecuador filed an international lawsuit on Thursday to suspend payments on the loan from Brazil's development bank, alleging the terms are unlawful. Rafael Correa, the Ecuadorean president, has warned the country may not repay "illegitimate" debt, as oil export revenues have been hurt by falling prices and the global financial crisis. Correa said the results of a year long audit of Ecuador's debt found indications that much of the country's $10 billion foreign debt could be illegitimate. Credit crunch:  Celso Amorim, the Brazilian foreign minister, has previously warned that if Ecuador defaults on a loan from the BNDES, as Brazil's national development bank is known, it would end bilateral trade between the two nations.  "Whoever knows diplomatic practices knows exactly what this [recall] means," Amorim said in Sao Paulo on Friday. "We have wide co-operation with Ecuador and we will examine this co-operation in light of these decisions."  Wall Street credit rating agencies have said Ecuador is among the least credit worthy countries in Latin America. The country defaulted on $5.8 billion in bonds in 1999, also amid a sharp fall in oil prices.

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Paschen

Thank you for the info Rahul, That is a substantial Amount of money and the circumstances are questionable at best.


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First Flagged at 2:40 AM, Nov 22, 2008 by Paschen
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