Chavez Threatens to Nationalize Banks
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)
You see, if the banks are nationalized then the devaluation of the currency can go smoothly and the government can prop up the banks quietly without a fuss. Well, not as much of a fuss as with commercial rather than government-run banks.
I remember wishing that Oregon would have passed its universal health care scheme (an 11% payroll tax to pay for it) back in 2002. Then we could all watch as the experiment unraveled. But now we have a whole country turning into a "socialist paradise" at top speed and we all get to watch its demise.
Oh, did I mention that Chavez has threatened to nationalize the Sidor steel company, too?
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.
"I prefer not to," Chavez added, as he ordered Mining Minister Jose Khan to depart immediately for the company's headquarters and come back with a recommendation with 24 hours.
I like the sop he gave to Sidor: "I prefer not to" nationalize you. But just to make sure you're paying attention, I'm dispatching my Mining Minister to make sure you get the message.