Friday, June 12, 2009

Ecuador Buys Back 91% of its Debt

Ecuador bought back 91 percent of its defaulted bonds this week, Reuters reported. It also promised to take action against other "illegal debt". Ecuador is now one of the first countries to get away with defaulting on its debt even though it has the means to pay it back.

“These debts were imposed by force,” President Rafael Correa said after the government disclosed the buyback results. “We have rebelled against the system that established odious, unfair, illegal, immoral debts.” He believes that Ecuador should not be responsible for paying back debt incurred by previous corrupt governments.

The debt purchase comes as President Obama is attempting to repair the strained relations between the United States and Ecuador. Obama called President Correa on Wednesday to congratulate him on his April re-election, as well as to applaud the Ecuadorian people's commitment to democracy. "The president stated his desire to deepen our bilateral relationship and to maintain an ongoing dialogue that can ensure a productive relationship based on mutual respect," the White House said on Thursday.

Image: BBC
Online sources: Reuters, Bloomberg

1 comment:

Anonymous said...

way to go Correa!