Venezuela opens talks with creditors to renegotiate a crippling debt that has left citizens sifting through garbage for food. As Silvia Antonioli reports, the once-prosperous OPEC nation is trying to avert a default that would plunge its economy into deeper crisis.
It has been on the brink of collapse for a while but maybe never as close to it as today... Venezuela's president Nicolas Maduro has summoned hundreds of bondholders in a desperate attempt to prevent a default that would plunge the country into its darkest economic crisis All this while poverty and violence escalate and as crude production in the oil-dependent nation hits its lowest level in almost 30 years. SOUDBITE Peter Rosenstreich, Head of Market Strategy, Swissquote Bank: "It's going to be very difficult for Venezuela to avoid just a complete default given the sort of macro scenario that they're in right now." Many of the lenders who hold some 60-billion-dollars in junk bonds declined Maduro's invitation They say they are confused about what he is trying to achieve worried about their own security in violence-torn Caracas and put off by the latest U.S. move against the Latin American country and its officials. SOUDBITE Peter Rosenstreich, Head of Market Strategy, Swissquote Bank: "T he Venezuelan economy is suffering significantly so getting the cash forward to support not defaulting it's going to be difficult. There's also the idea that the sanctions against Venezuela by US has eliminated US banks from participating both in buying new issues as well as even discussing potential solutions to a possible refinancing or bailout." Venezuela did make alomst 2-billion-dollars in payments to lenders in the past two weeks- although with some delay and against the odds, markets expected the payments to continue. It is not clear what kind of scenario a default would open, but the crippling crisis that left citizens sift through garbage for food is already a stark contrast with the times of prosperity seen under President Hugo Chavez.