Venezuela crisis raises talk of ‘Odious debt’ doctrine
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“Venezuela made an excellent argument for applying the odious debt doctrine with the move to a Constituent Assembly,” said Anna Gelpern, a law professor at Georgetown and a former Treasury official. “It offered up a rare bright line between what might be an unsavory regime and an illegitimate one.”
If the current regime is ousted, a new government could invoke odious debt as an excuse to refuse to recognise any new loans incurred by the Constituent Assembly. Given Venezuela’s lack of market access that would probably primarily affect any new loans extended by the likes of China or Russia, not existing bondholders.
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