Social Spending No Risk To Debt

Ecuador's congress has approved the government's US$10.36bn budget plan for 2008, but has reallocated US$327mn earmarked for public debt payments to social spending. President Rafael Correa has threatened to restructure the country's foreign debt on a number of occasions, but we remain confident that the government is now committed to repaying its debt. Indeed, Correa has earmarked US$2.01bn for debt reservicing in 2008, which we believe will be sufficient to meet coupon payments.

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