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Submerged in unpaid debt and in the middle of a terrible crisis, Venezuela would be a perfect candidate for the vulture funds
The economic crisis in Venezuela has forced President Nicolás Maduro to look beyond the country's borders for the sustenance that will allow him to finance his regime. However, despite the debt acquired, the economy does not improve, which has resulted in multi-million dollar defaults.
This would be an attractive outlook for the so-called vulture funds, which are enriched by buying debt from countries in crisis and litigating in international courts. However, the vultures, despite having reached out to Venezuelan affairs a couple of times in the past, have not yet fallen sharply on the country in crisis.
Everything seems to indicate that the reason why the siege of the vulture funds has been delayed is the economic sanctions that Donald Trump has imposed on Venezuela. Since the sanctions prohibit US banks, companies and individuals from doing business with Venezuela, the vultures, mostly Americans, have had to stay away.
This does not mean that the sanctions are beneficial for Venezuela, in any way. The measures that Trump has adopted to apply pressure on the Maduro regime prohibit Venezuela from restructuring its debt or selling assets in the United States to dispose of funds, which has forced them to resort to acquiring new debts with Russia and China at a rapid pace.
Even without vultures, there is pressure on Venezuela
Frequently, vulture funds are the last measure to get countries to pay their debts. By buying third-party debt at a fraction of its original cost and then suing the debtor country in US courts to force payment of the original sum, the vulture funds make countries honor their commitments. However, their ruthless strategies and disinterestedness in the countries has made them infamous at the international level.
For Venezuela, vultures may not be a concern at this time, but that does not mean they are not under a huge amount of pressure. Just a few days ago, a previously unknown firm in Coral Gables, Florida, United States, sued Venezuela for more than $ 34 million dollars that still do not receive by way of government bonds and interest on the default of these.
The bonds, which matured this year, were acquired by Casa Express Corp and had an original value of $ 29 million dollars. Now, before the evident non-payment of the bond, the company sued in front of a court in Manhattan.
This should not be the only unpaid commitment of the government of Nicolás Maduro, because this year he stopped paying all his creditors owners of bonds of the Venezuelan State and the state oil company PDVSA, accumulating more than $ 8 million dollars in interest on the debts.
According to Reuters, this is the first legal blow against Venezuela since they stopped paying their debts, which may mean that many more are on the way. So, despite the fact that the vultures do not arrive, Venezuela will continue to be full of litigation for other reasons.
LatinAmerican Post | Pedro Bernal
Translated from "La extraña razón por la que no han llegado los fondos buitres a Venezuela"