Venezuelan gov't places 84% of the 2012 debt
Payables pile up by indirect means
The price of the Venezuelan oil basket averages USD 107 so far this year. Nevertheless, government spending is so huge that these funds, together with collected taxes, do not suffice. As a result, the debt takes great leaps.
In accordance with the Annual Indebtedness Law, President Hugo Chávez's government may undertake new commitments for USD 14.95 billion in 2012 and has done it already for USD 12.48 billion, that is, 84% of the range.
When will all the room for debt issue be depleted? According to an analysis of think tank Síntesis Financiera in its report El Tesorero (Treasurer), at this rate, where the Ministry of Finance places bonds and notes for USD 418 million every week, a ceiling will be reached by the first week of August.
Nevertheless, the government has made provision. The amendment last March to the Financial Management Law will allow spending to run smoothly during the election campaign.
In accordance with the amendment, once the authorized amount for indebtedness is exhausted, the government will be able to cope with it, "provided that it deals with unexpected circumstances at the time of entry into force of the annual indebtedness law."
In this way, premised on such a vague provision, the Ministry of Finance still may issue debt. Furthermore, it has at hand indirect means where public bodies sell certificates to banks. These, in addition to the Republic bonds and equities, do not count for the legal limit.
José Vicente Rangel clearly said: "We are not conducting negotiations threatened with a gun in the head." He warned behind closed doors in the midst of the social upheaval occurred during the oil strike in 2002 and 2003. Dissenting Timoteo Zambrano answered back that no other option was available: "The thing is that otherwise, you do not negotiate."