Administration Gives Venezuela Short-Term Loan With PM-Venezuela
SUSANNE M. SCHAFER
Mar. 04, 1989
WASHINGTON (AP) _ The Bush administration is attempting to ease Venezuela's financial crisis by providing the new government of President Carlos Andres Perez with a $450 million ''bridge loan,'' U.S. officials have disclosed.
The South American nation saw its worst violence in 31 years, in a series of riots this week spawned by a series of price increases imposed as part of an economic reform program.
An estimated 300 people died and 1,500 were injured in the disturbances, touched off by the new austerity program designed by Perez to cope with a $33 billion foreign debt.
White House spokesman Marlin Fitzwater said Friday that President Bush spoke Friday with Perez in a telephone call, in which Bush lauded Venezuela's ''courageous and determined efforts'' to resolve its dire economic and financial problems.
Fitzwater said Bush had called Perez to express ''his concern for the recent difficulties'' in Venezuela.
Two other U.S. officials, who spoke on condition of anonymity, confirmed later in the day that the a bridge loan was approved as a means of serving the country's short-term financial needs.
''President Bush talked to him,'' one of the officials said. ''It's coming through,'' the official said of the loan.
Both officials are familiar with the Venezuelan debt problem and were involved in discussions about the loan.
The bridge loan will provide Venezuela with temporary relief because its depleted treasury has had difficulting meeting interest payments to commercial banks and other international lenders.
Fitzwater, asked about the reported loan, confirmed the two presidents discussed the issue in their phone call. But the spokesman said the matter wasn't finalized and the ''many details'' had to be worked out.
The United States has frequently provided bridge loans to other Latin American nations, such as Mexico and Argentina, which had depleted treasuries.
The austerity program was mandated by the International Monetary Fund as a requirement for granting $4.3 billion in loans over the next three years.
The IMF has taken steps to provide Caracas with an immediate $450 million payment.
Increases of 30 percent to 50 percent in public transport tariffs and price gouging by bus drivers set off the rioting, amounting to the worst violence in Venezuela in 31 years.
The nation of 18 million has been regarded as an island of tranquility amid a region of increasing violence, political stability and economic repression.
The president's action was seen as another attempt to give Perez's 29-day old administration some breathing room to deal with its financial woes. Vice President Dan Quayle attended Perez's Feb. 2 inauguration. The Venezuelan official was elected in a landslide Dec. 4.
''He reiterated U.S. support for their democracies and for President Perez's courageous and determined efforts to address his country's economic and financial situation,'' Fitzwater said, when describing the call between the two presidents.