Ecuador’s President Correa will announce on December 13 whether the country will default on part of its foreign debt.

Ecuador’s President Correa will announce on December 13 whether the country will default on part of its foreign debt.

QUITO, Ecuador – According to Quito newspaper El Comercio, President Rafael Correa will announce on December 13 whether his government will default on part of its foreign debt which a government audit commission has called “unlawful and illegitimate”.

The immediate effect of the president’s decision will be felt on December 15, the due date for interest payments of US$61 million on the country’s 2012 and 2015 global bonds.

On November 20, the Ecuadorian government published its audit commission’s report, which claimed to have found evidence of malfeasance and recommended suspending payment of “certain tranches and credits” obtained from international private banks between 1976 and 2006.

The commission also proposed bringing criminal charges against those responsible for negotiating the debt, among them former presidents Sixto Duran, Oswaldo Hurtado, Leon Febres, and Gustavo Noboa.

The Minister for Political Coordination, Ricardo Patiño, announced on November 2 that the government had hired two US law firms to advise it on its legal options.

Negotiations over the last five years will be audited

Comptroller General Carlos Polit announced on 1 December that his department will audit all renegotiations of the country’s debt that have taken place in the past five years.

The audit commission blames the sale of global bonds to international private banks for the ballooning of foreign debt from US$116 million in 1976 to over US$4 billion in 2006.

The French news agency AFP reports that by September 2008, Ecuador’s foreign debt had risen to US$10.6 billion, US$3.9 billion of which was accounted for by global bonds.