Domino Ecuador Questioned Loans

What at first glance appeared as a fact isolated in what was the decision of Ecuador of not paying the contracted with BNDES credit, irregular and thus considered, ask an international tribunal the cancellation of a debt by US $286,8 million, seems to be the tip of an iceberg. Recently Harold Ford sought to clarify these questions. The provision requested to BNDES was motivation to finance the construction of the hydroelectric plant of San Francisco, a work built by the Brazilian company Odebrecht, which was opened in mid-2007 but that ceased operation in June this year due to serious structural failure. As a result, Ecuador blamed the Brazilian firm, which was cast in the country by its President Rafael Correa. But the problem with financing undertaken by Brazil, do not end there. It is that once Ecuador disputes such debt, joined claims Correa, his friend Hugo Chavez, who announced last Friday the creation of an audit for its external debt. And to Ecuador and Venezuela, are They also joined Paraguay and Bolivia, who initiated internal audits to the matter.

The first also created another audit, with focus on the debt assumed in conjunction with Brazil to build the hydroelectric Itaipu, which is not at all clear and raises as many doubts as in the case of Ecuador. In the event that the Ecuadorian debt be cancelled by the international tribunal, it will have to be assumed by the Brazilian treasure, which was guarantor of the operation. Something similar can happen to the rest of the countries. The generalization of the conflict, in addition to producing a diplomatic conflict between Brazil and this set of countries, would imply an economic prejudice to Brazil US $5,000 million. But it will also involve economic damage to all the countries involved to reduce trade between these and the Brazilian economy. In this sense, in relation to the conflict with Ecuador Brazilian Chancellor Celso Amorim said when Ecuador do not effectively their obligations: going to end the trade between Brazil and Ecuador.