Chavez Threatens to Nationalize Banks & Businesses

[Francisco Montana]

Chavez Threatens to Nationalize Banks & Businesses

May 3, 4:53 PM (ET)
By JORGE RUEDA

CARACAS, Venezuela (AP) - Venezuelan President Hugo Chavez on Thursday threatened to nationalize the country's banks and largest steel producer, accusing them of unscrupulous practices.

"Private banks have to give priority to financing the industrial sectors of Venezuela at low cost," Chavez said. "If banks don't agree with this, it's better that they go, that they turn over the banks to me, that we nationalize them and get all the banks to work for the development of the country and not to speculate and produce huge profits."

It was not clear if Chavez was only referring to Venezuelan banks like Mercantil Servicios Financieros CA and Banco Provincial SA, or if he was also aiming the threat at major international banks with subsidiaries in the country, such as Citigroup Inc. (C) and Spanish banks Banco Bilbao Vizcaya Argentaria SA (BBV) and Banco Santander Central Hispano SA. (STD)

Chavez also warned the government could take over steel producer Sidor, which is majority controlled by Luxembourg-based Ternium SA. (TX) Shares of Ternium fell 3.9 percent to $26.15 in U.S. trading after Chavez's comments.

Sidor "has created a monopoly" and sold the bulk of its production overseas, forcing local producers to import tubes and other products from China and elsewhere, Chavez said.

"If the company Sidor ... does not immediately agree to change this process, they will obligate me to nationalize it," Chavez said.

Full Article

[enoch]

its been a long time since the US openly invaded a SA country - maybe Chavez (if he survives long enough) will help change that

sad but true

[JP226]

What the hell does he think he's doing. What is the benefit? He's going to run that country down the drain and piss off the rest of the world in the process.

[Tajir]

Uncle Sam would much rather see Pinochet in charge.

Viva Hugo Chavez!!

[Yorkshireman]

Uncle Sam would much rather see Pinochet in charge.

They'd have to dig him up then, he's been dead for over a year.

He was a good friend to Britain though during the Falklands war.

[Finn]

Chavez is slowly but surely tightening his grip on Venezuela, I read a while back that a newspaper columnist was thrown in jail for making fun off his daughter. Now he wants to take over banking and the Steel industry, I can smell another coup attempt.

Once word gets out that he's trying to set up a Socialist Paradise down there, I'm sure Venezuela will inundated with Green Card applications from Western Socialists who believe that that form of Government is superior.

[Douchebag]

Smart people in Venezuela are moving OUT of the country. Dumb ones that support Chavez, will eventually feel his wrath in the end.

[Last Roman]

heh, we all know how well it went for Latin America the last time they went through a nationalization trend. Have they forgotten their history so quickly?

[Tajir]

Don't worry, guys, it'll end up good for Venezuela.

Chavez is hated by the White elites in Washington and all over Latin America. He MUST be good.

[ErikinWest]

Ahahahahha! I love this guy. It's like watching a country slowly degenerate. Watch in two years from now, it will be a military dictatorship with out of control inflation. This is classical South American populist leader going dictator.

Erik

[Thanatos]

Time for another Cuba?

[IronBrig4]

This will probably turn into an unmitigated disaster for Venezuela.

On the other hand, I can see Chavez's reasoning. The private companies are importing materials from overseas, and many of them are owned by foreigners. As a result, very little capital or production stays in Venezuela. Since the Venezuelan government can do little to stop the multi-national corporations, the whole country is more sensitive to fluctuations in the world market.

I can see Chavez relying on technocrats to form institutions like Petrobras or Electrobras. Vargas pulled it off, and it helped to spur the "Brazilian Miracle" of the 60s and early 70s.

[Da Skinna]

Before he was kinda novelty, but now he's trying a lot harder to grab attention... the only next big thing he can do to ensure we all watch his little side show is if he converts to Islam...

[Cluny the Scourge]

It's about time someone took up Allende's standard in South America once again, with firmness and vigour, after the Americans ****ed them over and installed a reign of terror to reinforce the economic dominance of a few greedy cowboy-hat-wearing plutocrats.

[killerchinchilla]

I don't see why governments shouldn't be in charge of things like the steel industry, if they run it properly that is. He is a democratically elected leader and in the end if Venezuelans don't like him they can vote him out (eventually). I wish America would accept that its a democracy and accept they have ideological differences instead of making a big fuss about it all. If he ends democracy then that changes the situation but at the moment its a reasonably free county.

[danzig]

I don't see why governments shouldn't be in charge of things like the steel industry, if they run it properly that is. He is a democratically elected leader and in the end if Venezuelans don't like him they can vote him out (eventually). I wish America would accept that its a democracy and accept they have ideological differences instead of making a big fuss about it all. If he ends democracy then that changes the situation but at the moment its a reasonably free county.

Oh come on you aren't serious. Shutting down of newspapers that oppose him, the siezure of industry after industry, telling the military if members arent willing to take an oath to socialism they should leave and the oppression of any opposition and you call this a democracy? Venezuela's democracy exist is name only. Every move by Chavez has been to consolidate all the power in his hands from oil, to telecommunications, to media and now to steel and banking system. The result have been basic shortages in the country.

[killerchinchilla]

Oh come on you aren't serious. Shutting down of newspapers that oppose him, the siezure of industry after industry, telling the military if members arent willing to take an oath to socialism they should leave and the oppression of any opposition and you call this a democracy? Venezuela's democracy exist is name only. Every move by Chavez has been to consolidate all the power in his hands from oil, to telecommunications, to media and now to steel and banking system. The result have been basic shortages in the country.

Many countries which are 'democracies' do things like that to varying degrees. The fact is its still a democracy, bad as it may be, which is more than can be said about a number of countries which America supports (Saudi Arabia, Pakistan, Australia), I don't think nationalizing industries is a bad thing in itself. Also look at Poland where they are having massive purges of those who once worked with the former communist authorities. I think the only reason its a problem is because there sitting on so much oil and America doesn't have a monopoly on it.

[Erik]

I don't see why governments shouldn't be in charge of things like the steel industry, if they run it properly that is.

What's the benefit of having a state run steel industry or state run banks?
Except for what IronBrig4 said.

Nationalizing Oil/Gas is only natural, because ultimately it's the people of Venezuela who should own this oil, not a bunch of colonialists from Europe.

And nationalizing public transport, the electricity grid, roads, the postal service, health care etc. etc. I'm also in favor of because competition in those fields is either impossible or not practical.

But banks and steel industry is better run privately, I think.

[killerchinchilla]

What's the benefit of having a state run steel industry or state run banks?
Except for what IronBrig4 said.

Nationalizing Oil/Gas is only natural, because ultimately it's the people of Venezuela who should own this oil, not a bunch of colonialists from Europe.

And nationalizing public transport, the electricity grid, roads, the postal service, health care etc. etc. I'm also in favor of because competition in those fields is either impossible or not practical.

But banks and steel industry is better run privately, I think.

Banks often exclude the poorer, less profitable customers, in this day and age banking is a necessity and not being able to get an account can cause serious side effects for people. I'd also say a nationalised bank would also proved the government with more funds.

I'm not sure what the benefits of a state run steel industry would be in Venezuela to be honest as I can't see it being abandoned for cheaper production elsewhere, as happened in the UK. However I'm sure it does have its benefits, as well as its disadvantages.

[ErikinWest]

Banks often exclude the poorer, less profitable customers, in this day and age banking is a necessity and not being able to get an account can cause serious side effects for people. I'd also say a nationalised bank would also proved the government with more funds.

Excuse me; the banks exclude people who will not be able to pay them back. Which often includes the poor and lower class. If we gave out artificial credit do you know what would happen? People would default! Credit only exists because it allows people to increase productivity, and therefore most will be able to pay back their lone. This is a silly idea that everyone should be given bank loans. It would end up hurting the poor as they'll be in so much debt.

If you want to bother studying the effects of nationalizing banks you're welcome to. There are plenty of resources on the internet about the subject.

Erik