Goldman Gives Lifeline to Venezuela's Socialist Dictator

Reuters
Reuters
Author

06 June, 2017

Goldman confirmed the purchase Tuesday morning after the Wall Street Journal first reported it.

About two dozen protesters picketed outside the headquarters of Goldman Sachs in lower Manhattan, New York, on Tuesday over alleged transactions between the investment bank and the Venezuelan government.

Nevertheless, the transaction highlights the extent to which investors are willing to take on increasing levels of political and economic risk as they seek high-yielding investments when interest rates still hover near zero, the New York Times explained.

He urged "good-faith negotiations" among all Venezuelans, adding that "the main responsibility for showing good faith in any negotiations now is on President Maduro and the government of Venezuela. We agree that life there has to get better, and we made the investment in part because we believe it will", the Wall Street bank affirmed.

Last month, on 24 April, in a resolution adopted by 450 votes to 35, with 100 abstentions, the EU Parliament strongly condemned the "brutal repression" exercised by the Venezuelan security forces, as well as irregular armed groups, against the peaceful protests, as a result of which more than 20 people have died and many wounded.

"The bondholders know that they're being paid at the expense of the country's hunger", Jorge Botti, a Venezuelan businessman, told Bloomberg.

MEPs denounced the continuing unconstitutional violation of the democratic order in Venezuela and the lack of separation of powers and independence of the branches of government.

"We are invested in PDVSA bonds because, like many in the asset management industry, we believe the situation in the country must improve over time", it said.

Maria Angela Holguin, Colombia's chancellor to the OAS, said in Spanish that coming up with a solution to the crisis in Venezuela is becoming "increasingly urgent".

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In Venezuela, Maduro's critics have for two months staged street protests, which have left almost 60 people dead, to demand he hold early elections. For another, its decision to buy the bonds at fire-sale prices was an expression of faith in the Venezuelan people.

For its part, Goldman Sachs says it bought the bonds in a secondary market, meaning it wasn't a direct trade with Venezuela's government.

The government of President Nicolas Maduro has been under attack by OAS chief Luis Almagro, who has vocally backed Venezuela's opposition and promoted foreign intervention in the country, leading Caracas to begin the process of withdrawal from the global body.

Mr Maduro says the protests are a violent attempt at a coup and insists the country is the victim of an "economic war" supported by Washington.

Likely the most frustrating aspect for Goldman is the fact that they didn't even buy the bonds from the government.

It is has been officially declared to be a dictatorship by The Organization of American States.

A draft declaration submitted by Peru, Canada, the United States, Mexico and Panama called for, among other actions, "a halt to the convocation of a national Constituent Assembly as presently conceived", aimed at condemning the process to rewrite the Venezuelan Constitution that Maduro announced earlier this month.

Goldman Sachs and Venezuela's Information Ministry both declined to comment on the charges, but Murphy clearly would want to avoid a controversy - such as evidence of Goldman Sachs financing dictatorship - as his multi-million dollar campaign heads into the final stretch.

The ministers said they would reconvene about Venezuela before the June 19-21 General Assembly in Cancun, Mexico.


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