Tuesday, February 19, 2008

Promises, promises

What is it about otherwise hard-nosed Western central bankers and the Castro regime?

It's no exaggeration to say that when it comes to banking, Fidel Castro is the customer from hell: always asking for more and more credit and never, ever repaying a cent.

In fact, Castro decided some 20 years ago or so that he would simply stop paying his government’s quite considerable international debt, which is estimated to stand at more than USD11 billion. The man simply defaulted … and please, keep in mind that the debt we are talking about does not include the billions of dollars Castro owed his old pals in the now-disappeared Soviet Union.

Now, you would think central banks would be careful of doing any further business with a customer with such an atrocious credit history, right?

Well, Bloomberg reports today that the Mexican central bank has just reached agreement with the Cubans to “refinance” the regime’s debt with Mexico, which is worth about USD400 million.

Which essentially means that Havana has been given a new, multi-million dollar line of credit to purchase Mexican goods.

As for repayments …


Blogger Henry Gomez said...

Well it's just a subsidy to Mexican industries by another name. Why they don't just put away the pretext and directly distribute the cash to their own people without all the Cuban rigamarole is beyond me.

3:47 pm  

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