Guillermo Lasso and the Ecuadorian Debt

ECUADOR - In Brief 04 Aug 2016 by Magdalena Barreiro

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Some of our clients have expressed their concern regarding recent statements from Presidential Candidate Guillermo Lasso regarding his intention of "reviewing all foreign debt issued under this government".The statement is surprising coming from a former banker who truly understands the rules of financial markets. He was very critical of the debt buy back of 2009. However, every responsible Ecuadorian is worried about the rapid growth in public debt --foreign and domestic. The last private issue maturing in 2022 is extremely expensive. All other private issues from this government will also have to be taken care by the new government. In this context, my interpretation of such declaration is more one of warning against new issues in the present official period rather than one announcing a new moratorium on the current outstanding debt. I think that Lasso is also indirectly threatening to inspecting actions from this government to possibly take legal actions against Correa or other officials as it has been some of the stronger points of his campaign. So the threat is more against the government rather than against paying the debt. Finally, he is strongly opposing to the intended financing of the Refinery of the Pacific (some $13 b) against which is every other candidate as well, but that seems to be Correa´s obsession.Lasso has tried to maintain a neutral campaign in relation to personal attacks to Correa and has been very critic of the economic model instead. However, Correa is proposing (and will probably be approved by the Constitutional Court) to include a referendum along with the next presidential elections asking Ecuadorians if candidates with moneys in the so ca...