Guest wrote:
> Couldn't Venezuela just declare bankruptcy and pay back creditors
> pennies on the dollar like Argentina and other countries have
> done? Why do some countries have to pay dollar for dollar?
> Investing in Latin America is casino gambling. What do investors
> really expect? I expect nothing from Latin Americans.
Of course Venezuela and Maduro can do anything they want, including
simply ignoring their bond repayment obligations. I'm sure Maduro
would love to do that, but the problem is that if he does that, then
neither the government nor PDVSA will be able to borrow any more money
on international markets. Furthermore, imports of all products would
have to be done on a cash-only basis.
The Walker/Cooper proposal would allow Venezuela to declare bankruptcy
in an orderly fashion. They would still not be able to borrow on
international markets, but they could get substantial loans from the
IMF, which could be enough to get them by, which is what happened in
Greece and other countries.