Ecuador to default on debt
President Rafael Correa announced Friday that Ecuador would not meet a debt payment next week, making good on threats to default on obligations his government considers illegitimate.
Correa told a news conference in the city of Guayaquil that Ecuador would not make a $30.6-million interest payment due Monday on $510 million in bonds that mature in 2012.
“This foreign debt will not continue to be paid,” Correa said. Ecuador will offer a restructuring plan to creditors in hopes of avoiding a drawn-out legal battle, he said.
Correa threatened to default on Ecuador’s debt before his landslide victory in 2006.
A default effectively cuts Ecuador off from outside financing as it confronts a major budget shortfall, an analyst said.
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