As Crisis Mounts, Ecuador Declares Foreign Debt Illegitimate and Illegal

[annabanana]

Source: AlterNet

A special debt audit commission released a report charging that much of Ecuador's foreign debt was illegitimate or illegal.

Amidst the spreading global financial crisis, a special debt audit commission released a report charging that much of Ecuador's foreign debt was illegitimate or illegal. The commission recommended that Ecuador default on $3.9 billion in foreign commercial debts--Global Bonds 2012, 2015 and 2030--the result of debts restructured in 2000 after the country's 1999 default.

Although Ecuador currently has the capacity to pay, dropping oil prices and squeezed credit markets are putting President Rafael Correa's plans to boost spending on education and health care in jeopardy. Correa has pledged to prioritize the "social debt" over debt to foreign creditors.

The commission accused Salomon Smith Barney, now part of Citigroup Inc., of handling the 2000 restructuring without Ecuador's authorization, leading to the application of 10 and 12 percent interest rates. The commission evaluated all commercial, multilateral, government-to-government and domestic debt from 1976-2006.



Read more: http://www.alternet.org/audits/108769/

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Americans ought to be able to do this with the huge rate increases on those -"don't worry about it, your house will be worth MUCH more by then"- adjustable rate mortgages that were hawked to millions of trusting home buyers.

[natrat]

1. if you have an adj rate mortgage,and don't know its potential,you are an idiot