Brazil Threatens Ecuador with Reprisal After It Refuses to Repay Loan

Rafael Correa The Brazilian government has recalled to Brazil capital BrasÀ­lia its ambassador from Ecuador over the Andean country's suspension of payments on a Brazilian loan worth at least US$ 320 million.

Ecuador filed an international lawsuit on Thursday, November 20, to suspend payments on the loan from Brazil's BNDES (National Bank for Economic and Social Development), alleging the terms are unlawful.

Correa, said on Saturday, November 22, that the diplomatic tension between his country and Brazil, started in Brasí­lia, and not in Quito. "If they want to convert a commercial-financial problem into a diplomatic incident, this is the exclusive responsibility of Brazil," said the Ecuadorian president.

Correa said that his country likes Brazil a lot and that there is no reason for a fight. He also claimed that Ecuador did not call off the payment, but simply appealed judicially against the debt. "We didn't refuse to pay, nor did we throw the contract in the trash can," he concluded.

Lula expressed his "profound displeasure" with his Ecuadorian colleague for taking the loan debt to an international arbitration.

Rafael Correa, the Ecuadorian president, has warned the country may not repay "illegitimate" debt, as oil export revenues have been hurt by falling prices and the global financial crisis.

Correa said the results of a year long audit of Ecuador's debt found indications that much of the country's US$ 10 billion foreign debt could be illegitimate.

Celso Amorim, the Brazilian foreign minister, has previously warned that if Ecuador defaults on a loan from the BNDES it would end bilateral trade between the two nations.

"Whoever knows diplomatic practices knows exactly what this [recall] means," Amorim said in São Paulo on Friday, November 21.

"We have wide co-operation with Ecuador and we will examine this co-operation in light of these decisions."

Wall Street credit rating agencies have said Ecuador is among the least credit worthy countries in Latin America.

The country defaulted on US$ 5.8 billion in bonds in 1999, also amid a sharp fall in oil prices.



  • Show Comments (8)

  • Bob

    You all need to take a look at the “Confessions od an Economic Hit Man.” Google it, and you’ll have some idea where all your economic woes REALLY came from.

  • Augustus

    It truly amazes me that an upper middle class (possibly Upper Cass) from South America (of all places) would join forces with Scum of the likes of Chavez (the reef-raf army Monkey), Evo (the idiotic looking Native -South-American indian) the pathetic duo of ANCIENT Cuban gangsters (the Castro Brothers) along with the UGGLIEST MAN ALIVE from Nicaragua (Noriega)
    Indeed… What does a good looking, educated member of the South American elite has to do MINGLING with the Lowest of the low????
    😮 😉 🙁
    😮 😉 🙁
    😮 😉 🙁

  • Augustus

    JOAO – Brilliant analogy – KING LEAR
    You are indeed a brilliant (old :-)) scholar

    Such an analogy would never have occurred to me, not only because I never cared much for Shakespeare and particularly because (with the exception of our FAVORITE À¢€œPillarsÀ¢€Â) I never cared much for anything related to the horrific Middle Ages (incidentally, itÀ¢€™s fascinating that Shakespeare was as drawn to 200-300 years before HIS era as I am to mine)À¢€¦ As customary, I digressÀ¢€¦ I suppose the King is our À¢€œbelovedÀ¢€Â uneducated À¢€œRulerÀ¢€Â from Pernambuco whereas two of the three daughters are Dilma & Marta Suplicy (who is the third one??? The Male discussed recently whose name escapes me now?…)

    NOWÀ¢€¦ What remains to be seen is the end of the on-going modern Brazilian versionÀ¢€¦ Will it embody the truly tragic end in Shakespeare play (Perhaps with Lula carrying the body of Marta through Avenida Paulista) OR will it embody the Revised ending (which I understand) omits the tragic end (revised during Jane AustinÀ¢€™s time À¢€“ early 19th Century) where one of the daughters marries her Prince in a happy ending (in which case leave it up to you to construct a Brazilian analogy to the revisionist happy À¢€“ and unlikely À¢€“ conclusion)À¢€¦.
    😀 😀 😀

  • João da Silva

    [quote]Indeed fewer countries (and citizens thereof) are more PROUD… and
    Even FEWER have so much PREJUDICE agains others… [/quote]

    Augustus, my hats off to you. It never occurred to me to relate Jane AustinÀ‚´s novel with the behavior of our “Rascals” in power. Any comparison with the characters from “King Lear”? 😀

  • Augustus

    Sometimes, when I access one of my favorite novels (by one of my favorite authors – Jane Austin’s Pride & Prejudice), which by coincidence takes place just nearly 2 decades before Brazilian (dramatic) declaration of Independence in 1822), I tend to amuse myself by thinking that the title fits Brazil so Well…
    Indeed fewer countries (and citizens thereof) are more PROUD… and
    Even FEWER have so much PREJUDICE agains others…
    You got that right, CH-C! ( 😉 😉 )

  • ch.c.

    I have a MAJOR issue against the CHAVEZ GANG(STERS) –
    But…but…but… listening/reading to the thousands of filthy statements from Robin the Crook against the USA….I could hear….. Chavez Voice or Correa….or Castro…or Morales…or Ortega !!!!!

    Nooooo….difference….unfortunately !

    Let me laugh even louder :
    Reality is that Brazil is the Second Poorest Mercosur Member…..after Paraguay….when based on GDP PPP stats that Brazilians JUNKIES LOVE SO MUCH TO USE WHEN COMPARING BRAZIL AGAINST MORE DEVELOPED NATIONS !

    Of course….these same Brazilians junkies hate this GDP PPP stats…… WHEN comparing Brazil against other emerging nations !!!!!

    Guess why !!!!
    Reality ? Nothing to be proud of !

    – Brazilians junkies are still 10’000’000 % SURE….they are better than ALL others EMERGING NATIONS.
    – They already are 100’000 % (only) sure….they are close to fill the gap with developed nations….of course !
    – There are even some TRUE BRAZILIANS JUNKIES AND IDIOTS THAT ARE 1’000 % (ALSO ONLY) sure Brazil ALREADY SURPASSED MOST developed nations !

    😀 😉 😀 😉

  • Augustus

    Of course you are right
    Yet – THIVES should NOT be stealing from OTHER thieves ( 😉 🙁 ) LOL

    In addition, I have a MAJOR issue against the CHAVEZ GANG(STERS) – (VENEZ / BOLIVIA / ECUAD / NICAR / CUBA)
    AS SUCH, I consider anything little fault (let alone a big one) from the group UNACCEPTABLE!!!!

  • ch.c.

    If I understand the Brazilian poin t of view correctly it is…..
    Ecuador MUST
    – pay their debts to Brazil
    – but Brazil will not care at all if Ecuador doesnt repay their debts to others !
    – and of course, going to an international arbitration doesnt make sense to money owed to Brazil, but Brazil doesnt care if Ecuador doesnt go to international arbitration and decide UNILATERALLY to not repay their debts to others outside of Brazil, just as Argentina did a few years ago !

    Right ???????

    My own conclusion is very simple : crooks always cheat lie and hide one way or the other, especially all over South America !
    Proofs ? No problem :
    What is the continent with the most Governemental BANKRUPTCIES ON their foreign currencies debts, over the last 10 years, 20 years, 30 years, 40 years, 50 years ?
    Certainly not…AFRICA OR ASIA !!!!

    😀 😉 😀 😉 😀 😉 😀 😉

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