U.S. Excluded by Latin American Summit as China, Russia Loom

Dec. 15 (Bloomberg) — Latin American and Caribbean leaders gathering in Brazil tomorrow will mark a historic occasion: a region-wide summit that excludes the United States.

Almost two centuries after President James Monroe declared Latin America a U.S. sphere of influence, the region is breaking away. From socialist-leaning Venezuela to market-friendly Brazil, governments are expanding military, economic and diplomatic ties with potential U.S. adversaries such as China, Russia and Iran.

“Monroe certainly would be rolling over in his grave,” says Julia Sweig, director of the Latin America program at the Council of Foreign Relations in Washington and author of the 2006 book “Friendly Fire: Losing Friends and Making Enemies in the Anti-American Century.”

The U.S., she says, “is no longer the exclusive go-to power in the region, especially in South America, where U.S. economic ties are much less important.”

Since November, Russian warships have engaged in joint naval exercises with Venezuela, the first in the Caribbean since the Cold War; Chinese President Hu Jintao signed a free-trade agreement with Peru; and Brazil invited Iranian President Mahmoud Ahmadinejad for a state visit.

Read moreU.S. Excluded by Latin American Summit as China, Russia Loom

Ecuadorean President Correa: The country is in default

Correa Defaults on Ecuador Bonds, Seeks Restructuring

Dec. 12 (Bloomberg) — Ecuadorean President Rafael Correa halted payment on foreign bonds he calls “illegal” and “illegitimate,” putting the South American country in default for a second time in a decade.

The government won’t make a $30.6 million interest payment by Dec. 15, when a monthlong grace period expires, Correa told reporters in his office in Guayaquil. The $510 million bonds due in 2012 plunged to 23 cents on the dollar from 31 yesterday and 97.5 cents three months ago.

“I have given the order that interest payments not be made,” Correa said. “The country is in default.”

By defaulting, Correa, a close ally of Venezuelan President Hugo Chavez, fulfills a threat he has made since a 2006 presidential campaign that ended in a landslide victory. His decision comes as a deepening global economic slump throttles demand for oil, the country’s biggest export. Ecuador, which defaulted in 1999, owes about $10 billion to bondholders, multilateral lenders and other countries.

“I couldn’t allow the continued payment of a debt that by all measures is immoral and illegitimate,” Correa said. “It is now time to bring in justice and dignity.”

Read moreEcuadorean President Correa: The country is in default

Crisis spreads to Eastern Europe as Ukraine, Hungary and Serbia call IMF

Ukraine, Hungary, and Serbia are all in emergency talks with the International Monetary Fund, raising fears that an exodus of foreign investors will set off a systemic crisis across Eastern Europe.

A team of IMF trouble-shooters rushed to Kiev on Wednesay to draw up a possible standby loan to help Ukraine stabilize its bank after a panic run on deposits this month.

Read moreCrisis spreads to Eastern Europe as Ukraine, Hungary and Serbia call IMF

South America considers common currency

BRASILIA: South America is thinking of creating a common currency and a central bank along the lines of those in the European Union’s eurozone, Brazilian President Luiz Inacio Lula da Silva said yesterday.

The idea is a logical next step following the signing last Friday of a treaty creating a Union of South American States that aims to promote joint regional customs and defense policies, Lula said during his weekly radio broadcast.

“Many things still haven’t been realised. We are now going to create a Bank of South America. We are going to move forward so in the future we’ll have a single central bank, a common currency,” he said.

But, he added: “This is a process. It won’t be something that happens quickly.”
Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana, Paraguay, Peru, Suriname, Uruguay and Venezuela all signed up to the Unasur treaty creating the regional union during a ceremony in Brasilia last Friday.

Read moreSouth America considers common currency

Ecuador Bans Foreign Military Bases

Ecuador’s parliament has approved a law banning foreign military bases, a move which could prevent the US from using a key anti-drug smuggling base in the country.

Rafael Correa, Ecuador’s president, whose party controls the assembly, had previously said he would not renew the agreement allowing US forces to operate from the city of Manta.

At present the US lease on the Pacific coast base expires in 2009.

US officials say that air surveillance missions from the base have led to more than half of all drug seizures in the region, where most of the world’s cocaine is produced.

Read moreEcuador Bans Foreign Military Bases

“WAR HAS BEGUN”, SAYS VENEZUELA

March 5, 2008 — CUCUTA, Colombia – Venezuela and Ecuador reinforced their borders with Colombia yesterday as the three nations traded increasingly bitter accusations over Colombia’s cross-border strike on a leftist guerrilla base in Ecuador.Rejecting a Colombian apology as insufficient, Ecuador sought international condemnation of the attack during an emergency meeting of the Organization of American States, convened in Washington to help defuse one of South America’s most volatile crises in years.

Read more“WAR HAS BEGUN”, SAYS VENEZUELA

Chavez warns of “war” if Colombia strikes Venezuela

(Reuters) – President Hugo Chavez warned Colombia on Saturday it would be a “cause for war” if its forces struck inside Venezuelan territory as they did in Ecuador killing a top Colombian rebel commander there.“Don’t be thinking that you can do that here … because it would be extremely serious and would be a causa belli, a cause for war, (if there is) a military incursion in Venezuelan territory. There’s no excuse,” Chavez said in his most belligerent comments to date in a diplomatic dispute with Bogota.

Colombia’s military said troops killed Raul Reyes, a leader of Marxist FARC rebels, during an attack on a jungle camp in Ecuador in a severe blow to Latin America’s oldest guerrilla insurgency. The operation included air strikes and fighting with rebels across the border.

Chavez has been at odds with U.S.-backed Colombian President Alvaro Uribe over the Venezuelan’s mediation with the FARC, or the Revolutionary Armed Forces of Colombia, over the release of hostages held by the rebels.

The outspoken, anti-U.S. Chavez has called Uribe a pawn of the United States in the superpower’s plans to attack Venezuela. Colombia and the United States deny the accusation from Chavez who regularly says without providing evidence that Washington is plotting his ouster.

Chavez has withdrawn his ambassador from Bogota and in recent weeks insulted Uribe during his speeches.

(Reporting by Patricia Rondon; Writing by Saul Hudson; Editing by Peter Cooney)

Source: Reuters