Published: Fri, June 02, 2017
Worldwide | By Gretchen Simon

Goldman Gives Lifeline to Venezuela's Socialist Dictator


Waving Venezuelan flags, a small group of protesters outside the USA banking giant's headquarters in Manhattan shouted "Goldman Sachs Sucks!" The unicameral legislature plans to issue a resolution condemning the sale.

Venezuela has a financing requirement of $17 billion in 2017 with its Central Bank holding a reserves of just $10 billion.

Citing people familiar with the transaction, the newspaper said the company bought the bonds at 31 cents on the dollar, spending about $865 million.

US State Department Undersecretary for Political Affairs Thomas Shannon said the ultimate goal of the declaration was to "return to full respect for the rule of law, full respect for freedoms of political expression and participation" in Venezuela.

Goldman Sachs said the bond purchase was based on expectations that things in Venezuela will get better.

Borges charged in the letter that Goldman's deal offered a "financial lifeline" to President Nicolas Maduro's regime, which has been violently clamping down on protesters amid a lack of food, basic living necessities and law and order.

Through its asset management arm, GSAM, Goldman Sachs paid approximately $865m for $2.8bn worth of PDVSA bonds issued in 2014.

"This was not a pleasant meeting", said today European Parliament President, Antonio Tajani, in a press conference with Julio Borges, President of the National Assembly of Venezuela, in the EU Parliament in Brussels.

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Goldman Sachs is continuing to be the focus of Venezuelan anger - at least for critics of the country's president. But it's no mystery why a politician would rather aim his righteous protest at Goldman Sachs, vampire squid etc etc, than "Dinosaur Group".

Goldman Sachs said it bought the debt on the secondary market and did not deal directly with the government. "I also intend to recommend to any future democratic government of Venezuela not to recognize or pay on these bonds", Borges wrote. Amid the crisis, Maduro's government has prioritised paying its foreign debts over supporting its citizens. Yes, Maduro's government is one of the worst ones now infecting the planet, but there are many, many countries with human rights records which range from spotty to absolutely abysmal and American firms invest in them all the time.

Another opposition leader, Henrique Capriles, alleged that he and his entourage were "ambushed" and beaten by the Venezuelan National Guard at a protest in the capital, Caracas.

While some member countries of the Organization of American States met on Wednesday to discuss the crisis in Venezuela in Washington, authorities in Caracas continued using tear gas canisters and water cannons to disrupt a massive protest against President Nicolas Maduro. One of the sources - who was from Goldman Sachs - said that the intermediaries were in Europe.

Beke's mother, who died from cancer past year, could not get the chemo therapy treatments she needed to fight her illness because of the severe medical shortages in Venezuela.

Nicaragua, a staunch ally of Venezuela, opposed the crisis meeting altogether, arguing Venezuela was the victim of a "political lynching".

Maduro has said the protests are a violent effort to overthrow his government, and insists that the country is the victim of an "economic war" supported by Washington.

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