The Jim Bakker Show

Despite EU caution, France pursues tough line on Iran missile program

By John Irish

PARIS (Reuters) – France said on Wednesday it wanted an “uncompromising” dialogue with Iran about its ballistic missile program and a possible negotiation over the issue separate from Tehran’s 2015 nuclear deal with world powers.

Paris has already suggested that new European sanctions against Iran could be discussed over its missile tests, something EU foreign policy chief Federica Mogherini seemed to dismiss on Tuesday, keen not to raise risks to the hard-won deal that curbed Iran’s disputed nuclear activity.

On Sunday, Iran rejected a call by French President Emmanuel Macron for talks on its missiles, saying they were defensive in nature and had nothing to do with its nuclear energy work.

“France is concerned about the continued pace of the Iranian missile program, which does not conform with (U.N.) Security Council Resolution 2231 and which is a source of destabilization and insecurity for the region,” Foreign Ministry spokeswoman Agnes Romatet-Espagne told reporters in a daily briefing.

Resolution 2231, which enshrined the nuclear deal, calls on Iran not to undertake activities related to missiles capable of delivering nuclear bombs, including launches using such technology. It stops short of explicitly barring such activity.

“France wishes to examine all the diplomatic options: a frank and uncompromising political dialogue with Iran; investigations by the U.N. General Secretariat; if necessary, new European sanctions against Iranian entities or individuals involved in the ballistic program; and finally opening a negotiation on the subject,” she said.

President Donald Trump, who has resumed a confrontational U.S. approach to Iran in contrast with predecessor Barack Obama’s policy of detente, has said Iranian missile activity should be curbed and wants to punish Tehran over its role in Yemen and Syria.

Trump has also dealt a blow to Iran’s nuclear deal – agreed with Britain, China, France, Germany, Russia and the United States under Obama – by decertifying Iranian compliance with its terms, contradicting the findings of U.N. nuclear inspectors.

The U.S. Congress now has until mid-December to decide whether to reimpose economic sanctions on Iran that had been lifted in exchange for limiting its nuclear program in ways meant to prevent it developing an atomic bomb.

But the EU, which normally coordinates closely with Washington on international sanctions, has been lobbying hard to keep the nuclear pact alive, saying it should be kept separate from missile and regional security matters.

France’s tougher line on the missile issue appears to reflect a concern that Iran might eventually try to arm a missile cone with a nuclear bomb, should it ever build one. Tehran has repeatedly denied any intent to do so.

Romatet-Espagne reiterated the view that the nuclear deal should be kept separate, but said the ballistic missile issue was being discussed with fellow EU governments and Mogherini’s foreign service.

Foreign Minister Jean-Yves le Drian had been due to visit Tehran before the end of the month, although that has now been pushed back to later in the year due to a busy schedule, a diplomatic source said.

Any EU-wide sanctions action requires the unanimity of all 28 member states but there is no consensus on new punitive steps against Iran, a fact made clear by Mogherini on Monday.

“We didn’t discuss, not today, not last week (and) I don’t foresee any discussion also in the future, further sanctions from the EU side on Iran,” she said, alluding to Macron’s remarks, after a meeting of EU foreign ministers.

(Reporting by John Irish; editing by Mark Heinrich)

Flash floods kill at least 10 in downpour near Athens

By Vassilis Triandafyllou and Alkis Konstantinidis

MANDRA, Greece (Reuters) – At least 10 people died in flash floods in Greece on Wednesday in the most deadly such incident in recent years when a torrent of red mud swept through towns west of the capital Athens after heavy rain, authorities said.

Torrential rain of this type is uncommon in Greece, where poor infrastructure can leave citizens vulnerable to flooding.

The overnight deluge turned roads in the industrial towns of Nea Peramos and Mandra, about 27 km (17 miles) west of Athens, into fast-flowing rivers and trapped dozens of people in their homes or cars.

Some residents were forced onto rooftops and balconies while cars were thrust onto porches or tipped onto their side. Twelve people were rescued from a bus on a bridge.

“This is a biblical disaster,” Mandra Mayor Yianna Krikouki told state broadcaster ERT. “Everything is gone.”

Heavy vehicles, a bus and cars were stranded under more than a meter of water on a nearby motorway. The force of the water smashed through walls and broke through roads.

In Mandra, five people – two women and three men – were found dead either in their flooded homes or in allotments. Another two were found floating in the sea.

“The walls collapsed, the cars were carried away and they broke everything here. There is nothing left,” resident Marina Kolia said. “Water is everywhere in the house.”

The wall of a local cemetery crumbled and vehicles collided with tree trunks. The fire brigade said at least three people were missing, and an unspecified number of people injured.

Prime Minister Alexis Tsipras expressed regret at the loss of life and called for an emergency meeting with ministers.

Greece has had around a week of heavy rain. A state of emergency was declared in the west Attica region, which includes Nea Peramos and Mandra, on Wednesday.

Both towns, which have a combined population of about 20,000 people, lie in the foothills of a mountain in western Attica. Many Greek housing settlements are built without taking into account town planning regulations.

An Athens prosecutor ordered an urgent preliminary investigation into the deaths and destruction caused and was also investigating possible urban planning offences.

On Tuesday, Greece declared a state of emergency on the eastern island of Symi, just off the coast of Turkey, after a storm swept cars into the sea, damaged homes and cut off electricity and water supplies.

(Additional reporting by Karolina Tagaris and Renee Maltezou Editing by Matthew Mpoke Bigg)

Zimbabwe’s army seizes power, targets ‘criminals’ around Mugabe

By MacDonald Dzirutwe

HARARE (Reuters) – Zimbabwe’s military seized power early on Wednesday saying it was targeting “criminals” around President Robert Mugabe, the only ruler the country has known in its 37 years of independence.

Soldiers seized the state broadcaster. Armored vehicles blocked roads to the main government offices, parliament and the courts in central Harare, while taxis ferried commuters to work nearby. The atmosphere in the capital remained calm.

The military said Mugabe and his family were safe. Mugabe himself spoke by telephone to the president of South Africa, Jacob Zuma, and told him he was confined to his home but fine, the South African presidency said in a statement.

It was not clear whether the apparent military coup would bring a formal end to Mugabe’s rule; the main goal of the generals appears to be preventing Mugabe’s 52-year-old wife Grace from succeeding him.

But whether or not he remains in office, it is likely to mark the end of the total dominance of the country by Mugabe, the last of Africa’s generation of state founders still in power.

Mugabe, still seen by many Africans as an anti-colonial hero, is reviled in the West as a despot whose disastrous handling of the economy and willingness to resort to violence to maintain power destroyed one of Africa’s most promising states.

He plunged Zimbabwe into a fresh political crisis last week by firing his vice president and presumed successor. The generals believed that move was aimed at clearing a path for Grace Mugabe to take over and announced on Monday they were prepared to “step in” if purges of their allies did not end.

“We are only targeting criminals around him (Mugabe) who are committing crimes that are causing social and economic suffering in the country in order to bring them to justice,” Major General SB Moyo, Chief of Staff Logistics, said on television.

“As soon as we have accomplished our mission, we expect that the situation will return to normalcy.”

CAREENING OFF A CLIFF

Whatever the final outcome, the events could signal a once-in-a-generation change for the southern African nation, once one of the continent’s most prosperous, reduced to poverty by an economic crisis Mugabe’s opponents have long blamed on him.

Even many of Mugabe’s most loyal supporters over the decades had come to oppose the rise of his wife, who courted the powerful youth wing of the ruling party but alienated the military, led by Mugabe’s former guerrilla comrades from the 1970s independence struggle.

“This is a correction of a state that was careening off the cliff,” Chris Mutsvangwa, the leader of the liberation war veterans, told Reuters. “It’s the end of a very painful and sad chapter in the history of a young nation, in which a dictator, as he became old, surrendered his court to a gang of thieves around his wife.”

The opposition Movement for Democratic Change called for a peaceful return to constitutional democracy, adding it hoped the military intervention would lead to the “establishment of a stable, democratic and progressive nation state”.

Zuma – speaking on behalf of the Southern African Development Community (SADC) – expressed hope there would be no unconstitutional changes of government in Zimbabwe as that would be contrary to both SADC and African Union positions.

Zuma urged Zimbabwe’s government and the military “to resolve the political impasse amicably”.

Zimbabwe struggles: http://reut.rs/2zZkX8O

ECONOMIC DECLINE

Zimbabwe’s economic decline over the past two decades has been a drag on the southern African region. Millions of economic refugees have streamed out of the country, mostly to neighboring South Africa.

Finance Minister Ignatius Chombo, a leading member of the ruling ZANU-PF party’s ‘G40’ faction, led by Grace Mugabe, had been detained by the military, a government source said.

Soldiers deployed across Harare on Tuesday and seized the state broadcaster after ZANU-PF accused the head of the military of treason, prompting speculation of a coup.

Just 24 hours after military chief General Constantino Chiwenga threatened to intervene to end a purge of his allies in ZANU-PF, a Reuters reporter saw armored personnel carriers on main roads around the capital.

Aggressive soldiers told passing cars to keep moving through the darkness. “Don’t try anything funny. Just go,” one barked at Reuters on Harare Drive.

Two hours later, soldiers overran the headquarters of the ZBC, the state broadcaster, a Mugabe mouthpiece, and ordered staff to leave. Several ZBC workers were manhandled, two members of staff and a human rights activist said.

Shortly afterwards, three explosions rocked the center of the capital, Reuters witnesses said.

The United States and Britain advised their citizens in Harare to stay indoors because of “political uncertainty.”

The southern African nation had been on edge since Monday when Chiwenga, Commander of the Zimbabwe Defence Forces, said he was prepared to “step in” to end a purge of supporters of Emmerson Mnangagwa, the vice president sacked last week.

In the last year, a chronic absence of dollars has led to long queues outside banks and an economic and financial collapse that many fear will rival the meltdown of 2007-2008, when inflation topped out at 500 billion percent.

Imported goods are running out and economists say that, by some measures, inflation is now at 50 percent a month.

According to a trove of intelligence documents reviewed by Reuters this year, Mnangagwa has been planning to revitalize the economy by bringing back thousands of white farmers kicked off their land nearly two decades ago and patching up relations with the World Bank and IMF.

Zimbabwe dollar: http://tmsnrt.rs/2ALN6xd

(Additional reporting by Ed Cropley, James Macharia, Joe Brock and Alexander Winning in Johannesburg; Writing by James Macharia and Ed Cropley; Graphic by Jermey Gaunt Editing by Janet Lawrence and Peter Graff)

North Korea defector ‘stabilized’ after second surgery: South Korean surgeon

By Christine Kim and Joyce Lee

SEOUL (Reuters) – A North Korean soldier who suffered critical gunshot wounds during a defection dash over the border to South Korea this week stabilized on Wednesday after a second round of surgery, a doctor treating him said.

The soldier, whose rank and identity have not been disclosed, was flown by helicopter to hospital on Monday after his escape to South Korea in a hail of bullets fired by North Korean soldiers.

Wednesday’s surgery was “successful” in terms of staunching bleeding and the soldier had “stabilized much”, said Lee Cook-jong, the surgeon in charge of his treatment.

However, he remained unconscious and was not out of the woods, as complications from a severe hip fracture and possible infection remained major concerns, Lee said.

“We will be able to tell you after about 10 days,” Lee told reporters at a briefing, when asked about the soldier’s chances of surviving.

On Tuesday, government and military officials said the soldier was in critical condition but doctors expected him to live.

The soldier made his escape in a border “peace village” on the heavily guarded demilitarized zone between the two Koreas.

At first, he sped toward the border in a four-wheel drive vehicle but was forced to abandon it and flee on foot when one of its wheels came loose, South Korean officials said earlier.

He was hit by about seven bullets before he took cover behind a South Korean structure in a Joint Security Area (JSA) inside the demilitarized zone.

Doctors removed five bullets from him earlier and one more on Wednesday.

North Korea has remained silent on the issue, while no unusual activity has been detected at the border where the soldier defected, the South’s Unification Ministry said.

“There will need to be some questioning on why he defected after his treatment is over,” ministry spokesman Baik Tae-hyun told a regular briefing.

Monday was the first time since 2007 a North Korean soldier had defected across the JSA.

(Reporting by Christine Kim and Joyce Lee; Additional reporting by Hyunjoo Jin and Yuna Park; Editing by Clarence Fernandez, Robert Birsel)

Collapsed state housing in Iranian quake shows corruption: Rouhani

BEIRUT (Reuters) – The ease with which some state-built homes collapsed in Sunday’s earthquake in western Iran showed corrupt practices when they were constructed, Iranian President Hassan Rouhani said on Wednesday in a sentiment shared by many ordinary Iranians.

Some of the houses which collapsed in an earthquake that killed at least 530 people and injured thousands of others were built under an affordable housing scheme initiated in 2011 by Rouhani’s predecessor, Mahmoud Ahmadinejad.

“That a house built by (ordinary) people in the Sarpol-e Zahab region has remained standing while in front of it a government-built building has collapsed is a sign of corruption,” Rouhani told a cabinet meeting, state media said.

“It’s clear there has been corruption in construction contracts,” he said.

Sarpol-e Zahab is the town hardest hit by Sunday’s 7.3 magnitude quake, the deadliest in Iran in more than a decade.

A picture widely circulated by ordinary Iranians on social media shows a building with relatively little damage in Sarpol-e Zahab next to a heavily damaged government-constructed building.

This has fueled speculation that shoddy construction in the building of government housing had led to a higher number of casualties from the earthquake.

Rouhani said on Tuesday that any shortcomings in government constructed buildings in the earthquake zone will be punished.

Mohammad Hossein Sadeghi, the prosecutor general in Kermanshah, the largest city in the earthquake zone, said on Wednesday that the quality of construction of new buildings that were heavily damaged would be investigated and charges may be brought against anyone deemed responsible.

“If there are any problems with the construction, the individuals who were negligent must answer for their deeds,” Sadeghi said, according to the Iranian Students’ News Agency (ISNA).

An arrest warrant has been issued for a contractor responsible for a recently built hospital which was heavily damaged in the town of Islamabad-e Gharb, parliamentarian Heshmatollah Falahatpisheh said on Tuesday, according to the Iranian Labour News Agency (ILNA).

Residents in the earthquake zone have also complained about the slow and inadequate government response as they struggle to find food, water and shelter.

(Reporting By Babak Dehghanpisheh; Editing by Richard Balmforth)

Five dead in California shooting spree that ended at school: local media

(Reuters) – Five people died in a shooting spree on Tuesday that ended at a school in a remote area of rural Northern California and some children were among the wounded, according to officials and local media.

Law enforcement officers shot to death the gunman, who was among the five people who died in a series of shootings at seven or more locations, according to Redding, California, newspaper the Record Searchlight.

The shooting spree began at a home and ended at Rancho Tehama School near the town of Corning, the Sacramento television station KCRA reported, citing law enforcement.

The shooter was armed with a semi-automatic rifle and two handguns, Assistant Sheriff Phil Johnston told local media.

A number of students were airlifted for medical care after gunfire at Rancho Tehama School, Johnston said.

Law enforcement did not immediately say what might have motivated the shooter.

Sheriff’s Office officials could not immediately be reached for comment.

Enloe Medical Center in Chico, more than 40 miles (64 km) southeast of the school, received five patients, and three of them were treated and released, hospital spokeswoman Natali Munoz-Moore said by phone. She declined to provide any details on their conditions.

St. Elizabeth Community Hospital in the community of Red Bluff received two patients, including one who was stabilized and transferred to another facility, Amanda Harter, a spokeswoman for the facility, said in an email. Mercy Medical Center in Redding received three patients, including one who also was transferred elsewhere, said Harter, whose company, Dignity Health, runs both hospitals.

Shots were fired at the school and some people were injured at the campus but no students or staff members died, Corning Union Elementary School District administrative assistant Jeanine Quist said by phone. The area is about 120 miles (190 km) north of Sacramento.

California Governor Jerry Brown said in a statement he and his wife were “saddened to hear about today’s violence in Tehama County, which shockingly involved schoolchildren.”

“We offer our condolences to the families who lost loved ones and unite with all Californians in grief,” Brown said.

A parent, Coy Ferreira, said he was dropping off his daughter when he heard gunshots.

“One of the teachers came running out of the building and told us to all run inside because there was a shooter coming,” Ferreira told Redding, California, television station KRCR.

“So we all hurried up and ran and told the students to get in the classrooms.”

Once inside a classroom, Ferreira said he heard gunfire for over 20 minutes and a student in the room was struck.

Brian Flint told local media his neighbor was the shooter and had stolen his truck.

The shooter’s name has not been released.

(Reporting by Alex Dobuzinskis in Los Angeles and Peter Szekely and Daniel Wallis in New York; editing by Frances Kerry and Phil Berlowitz)

Puerto Rico requests $94.4 billion from U.S. Congress for rebuilding

By Daniel Bases

NEW YORK (Reuters) – Puerto Rico Governor Ricardo Rossello on Monday requested $94.4 billion from Congress to rebuild the island’s infrastructure, housing, schools and hospitals devastated by Hurricane Maria.

“This is a conservative estimate based on similar efforts that have been done in New York, New Jersey and of course in Texas most recently,” Rossello said at a press conference streamed online from the National Governors Association in Washington.

“Now, I am however confident that we have turned a corner. That we are now flowing out of the life sustainment phase and we are starting the recovery phase, and the rebuilding phase,” Rossello said.

In a letter to President Donald Trump, Rossello said recovery from the storm, the worst hurricane to hit the U.S. commonwealth in 90 years, exceeded the resources of the Federal Emergency Management Agency’s Disaster Relief Fund and associated programs.

At the top of priorities is $31.1 billion for housing, followed by $17.8 billion to rebuild and make more resilient the power grid.

Puerto Rico Resident Commissioner to the U.S. Congress Jenniffer González-Colón accompanied Rossello and said she introduced legislation to reform the disaster relief law known as the Stafford Act.

The reform would allow disaster recovery money to be used to modernize infrastructure, not just return it to recent condition. Puerto Rico’s infrastructure was already weak.

Restoring the power grid has been a top priority since Maria’s 150 mile per hour winds knocked it out completely on Sept. 20.

Rossello and the island’s power authority, PREPA, were criticized for a no-bid contract with a tiny private firm, Whitefish Energy, for a portion of the repairs. Rossello canceled the contract on Oct. 29 after an uproar over its provisions.

On Monday, a U.S. federal judge rejected a request by the federally appointed Financial Oversight and Management Board for Puerto Rico to install a former military officer to oversee PREPA, a victory for Rossello, whose government opposed the appointment.

The U.S. Department of Energy’s latest readings indicate 47.8 percent of power capacity has been restored.

Puerto Rico’s economy was already in recession before Maria landed and its government filed for bankruptcy in the face of $120 billion in debt and pension liabilities.

Rossello said the decisions Congress takes now will define “how successful we are in rebuilding Puerto Rico.”

(Reporting By Daniel Bases; Editing by Cynthia Osterman)

South China Sea code of conduct talks to be ‘stabilizer’ for region: China premier

MANILA (Reuters) – China’s agreement to begin discussions with the Association of Southeast Asian Nations (ASEAN) on the fine print of a code of conduct framework for the disputed South China Sea will be a “stabilizer” for the region, Chinese Premier Li Keqiang said.

“China’s greatest hope is for peace and stability in the South China Sea,” Li told ASEAN leaders in Manila.

Southeast Asia and China foreign ministers in August adopted a negotiating framework for a code of conduct in the South China Sea, a move they hailed as progress but seen by critics as a tactic to buy China time to consolidate its maritime power.

Li, addressing leaders of ASEAN grouping during a summit in the Philippines capital Manila on Monday, said there was a consensus on moving forward and to try to peacefully resolve the thorny issue.

“We hope the talks on the code of conduct will bolster mutual understanding and trust. We will strive under the agreement, to reach a consensus on achieving early implementation of the code of conduct,” Li said, according to a transcript of his speech released by China’s Foreign Ministry on Tuesday.

Li didn’t give a timeframe, but said he hoped this move would be a “stabilizer” for the region.

Critics say the agreement to talk on the details of the code of conduct is only an incremental move, with a final agreement not likely anytime soon. Despite a period of relative stability in the South China Sea, some countries at the summit said this shouldn’t be taken for granted.

The framework seeks to advance a 2002 Declaration of Conduct (DOC) of Parties in the South China Sea, which has mostly been ignored by claimant states, particularly China, which has built seven manmade islands in disputed waters, three of which are equipped with runways, surface-to-air missiles and radars.

All parties say the framework is only an outline for how the code will be established but critics say the failure to outline as an initial objective the need to make the code legally binding and enforceable, or have a dispute resolution mechanism, raises doubts about how effective the pact will be.

Signing China up to a legally binding and enforceable code for the strategic waterway has long been a goal for claimant members of ASEAN, some of which have sparred for years over what they see as China’s disregard for their sovereign rights and its blocking of fishermen and energy exploration efforts.

Malaysia, Taiwan, Brunei, Vietnam and the Philippines all claim some or all of the South China Sea and its myriad shoals, reefs and islands.

(Reporting by James Pomfret in Manila; Editing by Michael Perry)

U.S. hate crimes rise for second straight year: FBI

WASHINGTON (Reuters) – The number of hate crimes committed in the United States rose in 2016 for the second consecutive year, with African-Americans, Jews and Muslims targeted in many of the incidents, the FBI said on Monday in an annual report.

There were 6,121 hate crime incidents recorded last year, an almost 5 percent rise from 2015 and a 10 percent increase from 2014, the Federal Bureau of Investigation’s Hate Crimes Statistics report said. It did not give a reason for the rise.

Black Americans were targeted in about half the 3,489 incidents based on race, ethnicity or ancestry, the report said, followed by whites who were targeted in 720.

About half the 1,273 incidents that involved religion were against Jews. Muslims were targeted in 307 religion-based crimes, up 19 percent from 2015 and double the number in 2014.

There were 1,076 incidents involving lesbian, gay, bisexual or transgender people, with almost two-thirds of those targeting gay men.

The hate crimes recorded last year included nine murders and 24 rapes, the report said. Of the 5,770 known offenders, 46 percent were white and 26 percent were African-American.

The report was based on data voluntarily submitted by about 15,000 law enforcement agencies.

(Reporting by Ian Simpson; editing by Grant McCool)

Venezuela offers chocolates but little else to creditors

By Deisy Buitrago and Brian Ellsworth

CARACAS (Reuters) – Venezuela’s socialist government gifted chocolates to creditors on Monday, but offered no firm proposals at a brief meeting in Caracas that left investors without a clear understanding of the government’s strategy to renegotiate $60 billion in debt.

President Nicolas Maduro confused investors this month with a vow to continue paying Venezuela’s crippling debt, while also seeking to restructure and refinance it.

Both restructuring and refinancing appear out of the question, however, due to U.S. sanctions against the crisis-stricken nation. A default would compound Venezuela’s dire economic crisis.

Monday’s short and confused meeting, attended by senior Venezuelan officials blacklisted by the United States, gave no clarity on how Maduro would carry out his plan, bondholders and their representatives who participated said afterwards.

That means Venezuela remains with the dilemma of whether to continuing paying debt at the expense of an increasingly hungry and sick population, or defaulting on creditors and burning its bridges to the global financial system.

“There was no offer, no terms, no strategy, nothing,” said one bondholder, leaving the meeting that lasted a little over half an hour at the ‘White Palace’, departing with a colorful gift-bag containing Venezuelan chocolates and coffee.

But bond prices maintained last week’s rally, with one investor saying there was relief the meeting did not include a default announcement.

Nearly $300 million in late interest payments on three bonds – PDVSA 2027, Venezuela 2019 and Venezuela 2024 – was also due on Monday after 30-day grace periods ended. But bondholders appeared unconcerned at the delay, which was due in part to increased bank vigilance of Venezuela transactions.

“My expectation is that the coupon payments will come through as well,” said Jan Dehn, Head of Research at Ashmore Investment Management. “We know that these delays exist and why they exist.”

About 100 investors, including some bondholders from New York and lawyers representing creditors, entered the ‘White Palace’ via a red carpet and were greeted by a poster of Maduro’s predecessor Hugo Chavez at the entrance of the meeting room inside.

SANCTIONS OVERSHADOW MEETING

Chief debt negotiators Vice President Tareck El Aissami and Economy Minister Simon Zerpa – on U.S. sanctions lists for drug and corruption charges respectively – attended the meeting for half an hour.

They met with some bondholders, while others stayed out of the room on concerns about penalties for dealing with officials sanctioned by Washington.

El Aissami told creditors that Deutsche Bank may soon cut off some financial services to Venezuela, participants said.

Deutsche declined to comment.

He read a statement protesting unfair treatment by global financial institutions, including U.S. President Donald Trump’s sanctions aimed at preventing Venezuela from issuing new debt.

“Now Maduro can say: ‘I showed goodwill, the bondholders showed goodwill … but unfortunately because Uncle Sam is not playing ball we can’t (refinance)’,” said Dehn, who did not attend the meeting.

“I’m not hugely surprised nothing’s come out of that meeting.”

Separately, the European Union approved economic sanctions and an arms embargo on Venezuela on Monday, although it has yet to name who will be subject to the sanctions.

Markets continue to remain optimistic that Venezuela will service its debts, noting it has made close to $2 billion in payments in the past two weeks, albeit delayed.

Bond prices were up across the board on Monday, with the benchmark 2022 notes issued by state oil firm PDVSA [PDVSA.UL] rising 3.3 percentage points.

The economic implosion has already taken a brutal toll on Venezuelans. Citizens are suffering from malnutrition and preventable diseases because they cannot find food and medicine or cannot afford them because of triple-digit inflation.

The sight of poor Venezuelans eating from garbage bags has become a powerful symbol of decay. It contrasts sharply with the era of Chavez, when high oil prices helped fuel state spending.

Halting debt service would free up an additional $1.6 billion in hard currency by the end of the year. Those resources could be used to improve supplies of staple goods as Maduro heads into a presidential election expected for 2018.

But the strategy could backfire if met with aggressive lawsuits. A default by PDVSA, which issued about half of the country’s outstanding bonds, could ensnare the company’s foreign assets such as refineries in legal battles – potentially crimping export revenue.

(For a graphic on ‘Venezuela’s economy’ click http://tmsnrt.rs/2pPJdRb)

(Additional reporting by Corina Pons in Caracas and Dion Rabouin in New York; Writing by Andrew Cawthorne; Editing by Andrew Cawthorne, Frances Kerry and Rosalba O’Brien)

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