debt

Jopsie Eccles says they were told to pay £170 or go to court

A mum has blasted the “ridiculous” £170 airport parking fine she received after a five-minute drop-off led to the threat of court. Josie Eccles had travelled to the airport with her husband, 33, to catch a flight to Malta with her mum and three-year-old son.

The 32-year-old claims her husband pulled into the drop-off zone at around 2pm, unloaded their luggage and said goodbye before heading off. But the couple later realised they had forgotten to pay the airport’s £5 drop-off charge within the required 24-hour period.

Josie says they accepted they would have to pay a penalty and even tried checking the airport’s payment portal for the charge – but no fine appeared. “My husband was there for under five minutes,” said Josie, a marketing consultant from Cheshire.

“A couple of days later, I was still in Malta and was speaking to my husband on the phone and asked if he had remembered to pay the charge. I was frustrated that both of us had forgotten to pay within the allocated window, but aware that these things happen and just accepted we would probably have a penalty to pay.

“My husband then checked the payment portal on the website where you usually pay the charge and entered the vehicle details, expecting to see a penalty fine, but nothing was there. I tried again a few days later, and still no charge appeared, so we thought we’d just wait and see if we got a letter in the post.”

But it wasn’t until almost two months later that Josie says she opened a letter from a debt collection firm. The letter claimed she had ignored previous correspondence and said the charge had risen to £170. Josie was given the option of paying the £170 in full or £42.50 over four months, while the letter warned the amount could increase further and potentially lead to court action.

She says she was stunned because she had never received the original parking charge notice. Josie said: “I was very confused, as it had been two months since the airport drop-off and I had received no correspondence at all so to receive a letter from a debt recovery company seemed rather extreme. At this point, I thought it must be a misunderstanding, and I would be able to resolve the issue by speaking with them.”

Josie claims she immediately tried to appeal the charge through Manchester Airport’s car parking operator, APCOA. But she says she received an automated response telling her that she had missed the appeal window and that the matter had already been passed to debt collectors.

She then called the debt recovery firm to explain what had happened. According to Josie, they told her that Manchester Airport had evidence that a letter had been sent to her on June 5. But when she asked whether it had been sent by tracked or recorded delivery, she was allegedly told it hadn’t.

Josie says this left her in an impossible position because the original letter contained the information she needed to pay the penalty. She said: “Not at any point did I try to get out of paying anything. I just wanted the opportunity to pay the initial fine, which would have been £60 if paid within 14 days.

“The only way I would know how to pay the penalty fine was by reading the instructions sent in the letter, so without the letter I had no chance of ever paying the charge before it was handed over to debt recovery. He said my options were to either pay the fine in full, which is £170, or I could seek independent legal advice and email in a dispute that they would look into it.”

In the meantime, Josie says she received two further letters threatening potential court action and warning that the amount could rise to up to £235. Josie claims she contacted the debt firm again and says a member of staff confirmed that her emails had been received but told her the company would not investigate disputes.

She says she was told her choices were to pay £170 or go to court, where the charge could potentially rise. She alleges she was then told that Manchester Airport would be responsible for taking any court action. Josie said: “I completed an online enquiry for Manchester Airport explaining I wanted to pay the £60 fine, detailed my communication with the debt company and reattached the dispute I had submitted to them with all the legal grounds.

“Within 10 seconds of submitting, I had received an AI response stating this had been handed over to debt recovery and I should liaise directly with them. I then forwarded that response along with my online enquiry submission to the complaints department, saying that was not an adequate response and I would like somebody to review the case so I can resolve this and pay the £60 fine.

“I have still not had any response or acknowledgement.”

Josie insists that she accepts responsibility for forgetting to pay the original £5 charge on 30 May but she believes the escalation is unfair because she claims she was never given the opportunity to respond to the original penalty.

She said: “I’m extremely frustrated. I hold my hands up; we forgot to pay the standard £5 charge within the next 24 hours, so a fine was expected, but to increase it to up to £235 was ridiculous. If I had been ignoring communication, it would maybe be justified, but I have responded to every bit of communication I have received, which surely shows I would have responded had I received the initial letter.

“I can afford to pay the fine; it’s not about financial difficulty. It’s about the principle of the system being set up to catch you out and the lack of reason they have. If the letter is so important, surely it would be sent tracked?

“Or at least they would try a few attempts before sending it over to debt collectors.”

She believes airports should introduce a free grace period for motorists who are only at the terminal for a few minutes. Josie added: “I’ve used Manchester Airport many times both before and after this encounter and always paid the drop-off charge on time.

“They’ll have a record of this on their system, which validates the fact I did not intentionally avoid paying. Sometimes people forget and these things happen. Other passengers could easily make the same mistake.

“It’s very easy to forget. There’s no option to pay at a machine or barrier while you’re there, so they are relying on people remembering to pay later on, which, whether you’re the person travelling through the airport or the person doing the drop-off, it’s easy to get distracted.

“I’m sure that’s why they removed the barriers, as they knew it would catch people out. The cars are logged using ANPR on their registration plates, so surely you should be able to pay on the same payment system even if outside the 24-hour window, with an additional penalty charge added.

“I think it’s ridiculous airports charge you for drop-off and pick-up. I think under 10 minutes should be free, but unfortunately all airports in the UK at least charge these days.”

An APCOA spokesperson said: “We have been in contact with the customer and offered the original charge of £60. The customer has since made payment of the £60, and the matter is now resolved.”

Manchester Airport has been contacted for comment.

Experts have given their take on where the Pound is

Experts have urged Brits to buy holiday cash now as the Pound is expected to weaken over this week’s market chaos with a warning that “it’ll hit wallets immediately”. Bond yields have risen sharply, increasing the cost of government borrowing and renewing concerns about whether Britain’s growing public-debt burden is sustainable.

Although higher yields can sometimes support a currency by offering investors better returns, Sterling has weakened as markets focus instead on inflation, rising debt costs and the Government’s limited financial room ahead of the Budget. The Bank of England is expected to hold interest rates at 3.75% this month, leaving it caught between supporting economic growth and preventing higher energy and import costs from fuelling another wave of inflation.

For households, a weaker Pound could mean more expensive holidays, fuel, food and other imported goods. Rising gilt yields can also push up swap rates, placing further pressure on fixed mortgage pricing just as many borrowers prepare to refinance.

Dave Huggett, founder of Lucid Foreign Exchange, said there was no need to be patient when buying your holiday cash.

He added: “Higher gilt yields and worries about debt sustainability tend to weigh on the Pound. Not always straight away and not always by much, but it’s one more thing dragging on sentiment. When investors get nervous about a country’s finances, they usually want more reward to hold that currency, or they just move their money elsewhere.

“So what do you do? Buy it all now, or hold in the hope of a recovery. The answer to that always lies in the need, not the want. If you’re buying currency to go on holiday, you basically get what you’re given. ‘Getting it right’ on a few thousand Pounds still doesn’t really move the dial. But if the numbers are bigger, and the situation can afford a bit more patience, then zooming out and looking at the situation objectively often pays.”

Iain Thompson, director of Evolve Finance, said everything was affected by a weaker Pound.

He added: “A sliding Pound is a quiet inflation tax on everyday households. When the Bank of England holds interest rates down while government borrowing costs climb, currency markets lose confidence, causing Sterling to steadily weaken against the Dollar and Euro. For the average person, this isn’t just an abstract financial chart – it’ll hit wallets immediately.

“A weaker Pound means everything the UK imports, from petrol to supermarket groceries, becomes instantly more expensive, keeping domestic inflation sticky. Holidaymakers will feel the sting the fastest at the exchange bureau. If you have a trip planned over the coming months, waiting and hoping for a sudden Sterling recovery is a high-risk gamble.

“While predicting currency is never guaranteed, the downward pressure is real. If your holiday budget is tight, locking in half of your travel cash now protects you from worst-case rate drops, ensuring a sudden currency dip won’t derail your family holiday budget before you even pack your bags.”

Tony Redondo, founder of Newquay-based Cosmos Currency Exchange, said the Bank of England was between a rock and a hard place.

He added: “Rising UK gilt yields are a double-edged sword for the Pound. At first, they boost Sterling’s appeal, a fatter carry-trade return over rival currencies. But soon markets ask why yields are climbing: borrowing costs rising as investors fret over debt sustainability, with the UK’s debt pile racing toward £3 trillion.

“That leaves the Bank of England boxed in; raise rates to choke off the inflationary wave from Brent crude above $95 or hold rates down to protect growth. My money’s on Sterling grinding lower, toward $1.30 and €1.13 ahead of the 28 October Budget, as fiscal deficits erode investor confidence.

“For consumers, a weaker Pound means pricier holidays abroad and imported inflation with higher supermarket bills, fuel costs, and goods prices. Elevated yields also lift swap rates, pushing fixed mortgage pricing higher. Anyone with confirmed overseas costs should buy currency in tranches now, hedging against further falls without gambling on timing.”

Prem Raja, head of trading floor at Currencies 4 You, said people could save as much as €230.

He added: “The rise in gilt yields is not automatically good news for Sterling. UK 10-year borrowing costs reached 5.29%, their highest since 2007, but the Pound still fell below $1.35. Investors appear more concerned about inflation, debt costs and the Government’s limited room ahead of the October Budget than attracted by higher yields.

“The Bank of England is expected to hold rates at 3.75% this month. If markets scale back expectations of a later rise, Sterling could lose another 1-2% over the coming months. GBP/EUR is around €1.16-€1.17, but €1.15 is realistic if fiscal concerns grow. GBP/USD could retest $1.33-$1.34, although US developments matter too.

“Travellers would notice that: a 2% fall means roughly €230 less when exchanging £10,000. I would not tell everyone to buy everything now, but anyone with a confirmed Euro or Dollar requirement should consider securing part of it and staggering the balance. That limits the risk of further weakness without committing everything at one rate.”

Anita Wright, chartered financial planner at Ribble Wealth Management, said a weaker Pound arrived in people’s shopping baskets within weeks, not months.

She added: “Everyone will watch the Pound against the Dollar and Euro. That’s the wrong yardstick. Those currencies are run by governments with the same problem so the Pound can look stable at the bureau de change while quietly losing purchasing power where it matters the supermarket, the petrol station, the energy bill.

“The real test of a currency is what it buys at home, and on that measure Sterling has been slipping for some time. What’s actually going on is this. The BoE holds bank rate down while the gilt market demands 5% and more. That gap gets filled by the Bank buying gilts, which is printing money by another name.

“More Pounds chasing the same goods. Diesel is already tightening and Britain imports most of its energy and much of its food, so a weaker Pound arrives in your shopping basket within weeks, not months. On holiday money swapping Pounds for Euros just moves you from one leaking boat to another.”

Samuel Mather-Holgate, managing director and IFA at Swindon-based Mather and Murray Financial, said there was no point waiting for the Pound to get stronger.

He added: “Sterling is not staring at an instant cliff edge, but the warning lights are flashing. With 10-year gilt yields around levels last seen in 2008 and the Pound slipping below $1.35, markets are telling Britain the free lunch is over. Higher borrowing costs squeeze the Treasury, unsettle mortgage markets and make imported goods, fuel and holidays more expensive if the Pound weakens further.

“For families, this is felt at the airport exchange desk, in supermarket prices and in the next remortgage quote. I would not tell people to gamble on currencies, but anyone with a known Euro or Dollar cost in the next few months may prefer certainty over trying to outguess a very twitchy market. Waiting for a stronger Pound is starting to look like a heroic assumption.”

Nouran Moustafa, practice principal and IFA at Roxton Wealth, said the weak Pound could be seen in airports.

She added: “The Pound is being squeezed from both sides. UK borrowing costs are rising, but markets still expect the Bank of England to hold Bank Rate at 3.75% this month. Sterling has already slipped to around $1.35 and €1.16. For households, this becomes painfully real at the airport.

“A weaker Pound means your hotel, meals and spending money abroad quietly become more expensive without the price tag changing. But I would not tell somebody to panic-buy thousands of Euros today based on a currency forecast. Nobody can reliably call Sterling over the next few weeks.

“If you know you need €2,000 or $3,000 for a trip, buying it in stages is far more sensible than gambling your entire holiday budget on one exchange-rate prediction. The bigger warning is this: when markets lose confidence in government finances, ordinary people eventually feel it. The bond market may look boring. Its consequences absolutely are not.”

Published on
20/08/2026 – 11:18 GMT+2

The US national debt now stands at a record $40 trillion (€34.4tn), while the Treasury has responded to the bond market pressure by pledging to buy back far more of its own older securities.

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Washington’s two announcements landed on the same day and represent two symptoms of the same underlying strain: a government borrowing at a record pace just as buyers of its longest-dated debt are demanding higher returns to keep lending.

Buybacks work like a targeted repurchase. Rather than printing new money, the US Treasury uses cash it already has to repurchase older, harder-to-trade bonds from investors, improving liquidity without changing the total stock of debt.

From 9 September, the maximum size of each buyback operation in the 10-to-20-year and 20-to-30-year markets will at least double, from $2 billion (€1.7bn) to $4 billion (€3.4bn), running through the next quarterly refunding on 4 November.

The US Treasury said the change reflects “strong sponsorship from market participants” in that part of the curve, but the timing of the decision was no accident.

The 30-year yield had climbed on Tuesday to its highest level since 2007 amid what analysts called a buyers’ strike stretching back to late June, aggravated by a swelling supply of corporate debt tied to AI data centre spending.

Yields duly fell after Wednesday’s announcement, with the 30-year dropping roughly 9 basis points and the 10-year around 6, and Wall Street rallied.

Asked whether Americans should worry about the volatility, US President Donald Trump simply said: “No, I don’t think so.”

However, not everyone is convinced the fix goes deep enough.

The size of the increase is modest next to the $32 trillion (€27.5tn) Treasury market it is meant to steady, and notable economist Mohamed El-Erian suggested the outsized market reaction reflected hopes of broader intervention to come rather than the direct effect of the buybacks themselves.

Thomas Simons, chief US economist at Jefferies, said the announcement broke with Treasury’s usual pattern of steady, well-flagged communication about its borrowing plans and felt “shot from the hip”.

How the US national debt reached $40 trillion

The debt figure, confirmed by US Treasury data covering Tuesday, splits into $32.27 trillion (€27.75tn) held by the public and $7.78 trillion (€6.69tn) owed between government accounts.

It arrived roughly two fiscal years earlier than expected as the US Congressional Budget Office projected in May 2023 that the threshold would not be crossed until 2028, and it came remarkably fast even by recent standards: $39 trillion (€33.5tn) was reached only in March, $38 trillion (€32.6tn) the previous October.

The US government borrowed $1.8 trillion (€1.5tn) in the first ten months of this fiscal year alone, already more than it borrowed in the whole of the last one, as spending on Social Security, Medicare, defence and interest payments continues to outrun revenue.

“The national debt is not just a number on the government’s balance sheet,” said David Young, president of the Conference Board’s CEO Center, noting it shapes the financial decisions Americans make daily.

The two stories feed each other.

A bigger debt load makes investors warier about lending long-term, which pushes yields higher. In turn, higher yields then raise the government’s own interest bill, adding further to the debt the US Treasury has to finance next.

Wednesday’s buyback expansion may ease the immediate pressure, but it does nothing to slow the borrowing driving it.

Published on
20/08/2026 – 8:19 GMT+2

Oil prices rose on Thursday, holding near their highest levels in weeks, as the deadlocked standoff between the United States and Iran kept supply concerns elevated in the Middle East.

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Brent crude, the international benchmark, rose 0.3% to $91.90 a barrel, while US benchmark crude edged up 0.2% to $84.57 a barrel.

Prices have climbed steadily since the start of August, when Brent was trading at around $87.38 a barrel, as the standoff over the Strait of Hormuz keeps supply concerns elevated even without any single new escalation.

Both benchmarks remain well above the barrel prices they were trading at before the war began.

Markets rebound on Treasury move

Global shares rallied on Thursday, reversing course after Wednesday’s heavy sell-off in artificial intelligence-related stocks, after the US Treasury Department said it would at least double the size of its buyback operations for longer-dated government debt, to $4 billion (€3.4bn) or more per operation, starting in September.

The move eased pressure on bond markets that had pushed yields to multi-decade highs in recent months, and lifted risk appetite across Asia.

South Korea’s Kospi surged 6.1% to 6,858.91, rebounding sharply after sinking 5.8% on Wednesday. Samsung Electronics jumped 9.7%, while SK Hynix surged 14.1% after the memory chipmaker announced a share buyback plan.

Japan’s Nikkei 225 added roughly 0.9%, while the Topix rose 0.8%, recovering some of Wednesday’s losses. Hong Kong’s Hang Seng gained 1.1% to 25,786.32, and the Shanghai Composite rose 0.3% to 3,905.23. Australia’s S&P/ASX 200 was up 0.3% to 9,066.40.

Bond yields ease from multi-decade highs

The yield on the 10-year US Treasury fell to around 4.64%, from 4.71% on Tuesday, while the 30-year yield dropped to 5.18% from 5.28% — pulling back from its highest level since 2007.

Yields have climbed in recent months on concerns over inflation stemming from the war in Iran and rising government debt.

Japan’s 10-year government bond yield, which had been trading near a three-decade high, fell to around 2.83% from more than 2.89% on Wednesday.

On Wall Street on Wednesday, the S&P 500 climbed 0.2% for its first gain in four sessions, snapping a three-day losing streak. The Dow Jones Industrial Average and the Nasdaq composite each added 0.2%.

The US dollar rose to 158.60 yen from 158.16, while the euro slipped slightly to $1.1676 from $1.1677.

Additional sources • AP

Paramount Skydance’s proposed $111-billion takeover of Warner Bros. Discovery could result in 4,500 jobs eliminated in Los Angeles over a three-year period, according to a new report.

Los Angeles County supervisors earlier this year wanted to explore the potential economic impact of David Ellison’s proposed union of two historic Hollywood studios. The report, completed this week by CVL Economics, paints a sobering picture of the potential aftermath of the debt-laden deal, including the prospect of an estimated $1.26 billion in lost wages.

“Los Angeles County’s film and television economy is already undergoing a significant structural contraction,” the report said. “The proposed merger of Warner Bros. Discovery and Paramount Skydance introduces an additional source of risk into that already changing market.”

California Atty. General Rob Bonta is leading a coalition of 12 states attempting to block the merger on antitrust grounds. A trial has been set for March. Paramount and other groups, including cinema chain owners and some Hollywood unions, have agitated for a settlement to curtail months of uncertainty over whether the deal will go through.

The proposed merger has been controversial in Hollywood due to fears of widespread layoffs. The Writers Guild of America has brought its own lawsuit to thwart the deal.

The goal of the county’s report was to provide “a comprehensive assessment of the merger’s production workforce implications,” amid the ongoing decline of L.A. based film and television production work. Los Angeles has witnessed the elimination of more than 50,000 entertainment jobs since 2022.

The 120-page report, from the county’s Department of Economic Opportunity and Film Office and requested by Supervisor Lindsey Horvath, found that more than 15,000 corporate roles would be at risk, including an estimated 2,495 jobs based in Los Angeles County.

The two companies would have an overlapping workforce within its linear cable channel divisions, film and television studios, streaming operations and corporate functions, including marketing, technology and advertising sales.

“Effects on crews, crafts, post-production personnel, vendors, and production-serving small businesses,” could also be substantial, the report said.

Paramount, in a statement, said the report highlighted the industry’s troubles and made a case for the merger.

“LA County’s own economic report underscores what we have been saying all along: our industry is in decline, production is down and jobs are being lost — and lost for good if we don’t act,” Paramount said. “Our plan to invest $30 billion annually in production and release at least 30 films a year.”

That commitment, Paramount said, would lead to “more jobs over time, and ultimately, a stronger, more durable entertainment industry for generations to come.”

Paramount has received clearances from the U.S. Justice Department and 65 other regulators around the globe to complete the merger.

For now, Bonta’s lawsuit is standing in the way.

Paramount has promised investors the deal would lead to at least $6 billion in cost savings through the consolidation of operations. The company has said the merger would ultimately be good for consumers and workers because a combined Paramount-Warner Bros. would have greater resources to compete with tech giants that are investing heavily in entertainment.

But the report pointed to the high level of debt that Paramount would have to take on — nearly $82 billion — to buy the stock of Warner Bros. Discovery shareholders to finalize the takeover.

“If revenues underperform or planned savings prove more difficult to achieve, pressure to identify additional cost reductions could increase,” the report said.

The two companies already are carrying substantial interest costs due to their existing debt structures. “In the quarter ended June 30, 2026, the two companies reported a combined $712 million in operating income and $737 million in net interest expense,” the report said, meaning that the companies were producing less profit than what was needed to support their debt obligations.

Despite Paramount predicting cost savings and reduction in debt over time, “those savings will take several years to fully realize,” the report said.

David Ellison was hoping to wrap up his $111-billion merger with Warner Bros. by September.

(PATRICK T. FALLON/AFP via Getty Images)

Television production in Los Angeles could be especially vulnerable, in large part, because Paramount and Warner Bros. already have moved most of their feature film projects outside of L.A. High levels of TV production continues at Warner Bros. complex in Burbank and Paramount’s and CBS’ soundstages in Hollywood and Santa Clarita.

“The economic impact extends well beyond employment,” with an expected elimination of $547 million in tax revenue, including $78.6 million in local taxes, the report said.

It noted that Warner Bros. and Paramount films were “particularly employment-intensive.”

“Their theatrical releases carry 2.74 times as many screen credits as the average theatrical release, while their streaming films carry twice as many,” the report found.

The document also highlighted a pre-existing pull-back in production at the two studios in recent years — something that Ellison plans to correct.

Paramount was struggling to remain solvent prior to the Ellison family’s purchase of the media company last year. Warner Bros. had scaled back offerings following Discovery’s $43-billion takeover of WarnerMedia in 2022 as it struggled to contain the debt from that deal.

“Between 2019 and 2025, Warner Bros. Discovery and Paramount accounted for a net reduction of approximately 195 major U.S. releases,” the report said. At the same time, other major distributors combined “added about 67 projects.”

Ellison is looking to finalize his massive Hollywood deal — folding CNN, HBO, TBS, Food Network and the Warner Bros. film and television studios under Paramount — as quickly as possible. He must hold together Paramount’s coalition of financiers and manage rising expenses, primarily legal fees and escalating obligations to Warner shareholders.

The state attorneys general, including from Colorado, Oregon, Nevada, Washington and New York have argued that the blockbuster merger — the largest in Hollywood in decades — would violate the century-old Clayton Antitrust Act.

Paramount hoped the trial over Bonta’s lawsuit would begin in November but U.S. District Judge Araceli Martínez-Olguín set the trial for March 2.

If the deal goes forward, just four studios — a post-merger Paramount-Warner, Disney, NBCUniversal and Sony Pictures — would control 86% of movies that are widely released (in more than 3,000 movie theaters), according to the attorneys general lawsuit. Paramount has argued that projects from Amazon MGM, Netflix and Apple should be included because they compete with the traditional companies for talent and audiences.

Paramount-Warner Bros. would also own more than 50 cable channels, including HGTV, Animal Planet, BET, MTV and Comedy Central.

The Financial Times turned heads when it got the scoop that the Venezuelan government is to reveal a debt pile of over $240 billions in its recently announced foreign debt restructuring, well over previous estimates of around $150-200 bn. Although this was sold as a shocker, it’s actually misleading because it validates the false claim that all of Venezuela’s incurred debt (whether written in a contract registered with the SEC or a whisky-soaked napkin) has the same validity and ought to be paid or else to re-enter international finance markets and attract foreign investment. The truth is that not all debts are created equal, nor do Venezuelans have to pay for all of it. So what is the actual extent of debt Venezuela has to pay? And given the recent announcement, what are the chances of Delcy & Co. of pulling this off?

What is the actual debt?

Venezuela faces late payments and arrears for sovereign and PDVSA bonds issued in the US with ironclad legal and conflict-resolution provisions in US courts. All of this debt is easily quantifiable, as it was approved by the Venezuelan parliament, in the case of the Republic, or included in financial statements, in the case of PDVSA. This amounts to $60 bn, plus $40 bn in arrears. This debt is legally valid and backed by evidence, and has many provisions on cross-default and other legal remedies for bondholders. Its successful restructuring is necessary for the country to re-enter international financial markets. Thus, it is the one that requires urgent attention and probably more willingness to compromise. Some question the validity of the 2020 PDVSA bond, which was issued with a lien over the shares of Citgo’s holding company, but a recent ruling by a NY court established that the bond was validly issued, and it was a taste of the results that a strategy of contesting these bonds in courts (with provisions drafted by the best lawyers money can buy) will yield instead of negotiating.

Venezuela also owes $20 bn in unpaid arbitral awards for the expropriation extravaganza of the late Hugo Chávez. These unpaid arbitral awards expose the country to international litigation and seizure of assets, while not as fundamental to restore access to international finance as the bonds. Its payment is necessary to assuage international markets and foreign investors. There is also $4 bn in debt to development banks, which is very important to honor to regain market access and restore investor confidence.

All of this amounts, in a worst-case scenario, to around $200 bn. If the debt restructuring is indeed a serious endeavor, it will focus on renegotiating these amounts, particularly the bonds.

Venezuela also owes around $50 bn to suppliers and contractors of the oil industry. Settling this debt is necessary to significantly increase oil production. However, as much of this debt has not been properly audited and may include creditors involved in corruption schemes, quantifying, negotiating, and paying it will probably take more time, and the focus should be on paying the companies that the country needs to re-engage to increase oil production and recover oil infrastructure.

Venezuela also owes China around $10-20 bn under an “oil-for-loan” financing mechanism from the Chávez era. Given that China is a major global power player, it is important to honor this debt. The Chinese and chavismo had already negotiated oil shipments to service debt, and the Chinese are very well aware of the mistake this scheme was and will probably be accommodating as long as they keep getting paid.

Non-kosher debt

You are probably wondering why I do not mention Cadivi and unpaid FX claims in the total debt. The catch is that unsettled Cadivi claims are not foreign debt proper, but administrative authorizations to convert local currency into FX under a foreign exchange control regime. In past foreign exchange controls in Venezuela, case law determined that these authorizations were not enforceable debt and claimants took the loss and were never paid. This will happen again.

Venezuela also owes Russia around $6 bn. Considering the current circumstances, its restructuring and payment can wait.

Venezuela needs a bailout, which can only come from the IMF. But IMF intervention is an impossible demand right now for Delcy Rodríguez.

All of this amounts, in a worst-case scenario, to around $200 bn. If the debt restructuring is indeed a serious endeavor, it will focus on renegotiating these amounts, particularly the bonds. The Financial Times does not mention where this $40 bn difference comes from. Any debt that was not approved by Congress or was issued not following the legal procedure does not have to be included pari passu with the debt issued to Wall Street and the World Bank, and Venezuela is not obliged to pay it to borrow money again. Argentina did not have to renegotiate all of its debt to re-enter the credit market. Any other hidden debt that comes up during a restructuring can be challenged in court and the Venezuelan government can refuse to pay. We will not further mortgage our country’s future more than necessary to access international credit markets to enrich shady actors who profited from our misery and didn’t even bother to hire good lawyers for when shit hit the fan.

Can this work?

Renegotiating a sovereign debt this massive without the support of the IMF would be daunting to our brightest minds, not to mention to Delcy’s few English-speaking minions. There are huge obstacles in the way. PDVSA remains governed by a 19th-century bankruptcy regime that makes it very difficult to restructure its debt efficiently. Moreover, its bonds do not have collective action clauses, or CACs, meaning they can only be renegotiated with 100% agreement of bondholders, which, like in the case of Argentina, could lead to holdouts and years of litigation. Most of the bonds issued by the Republic do have CACs, so they would be easier to renegotiate with a haircut (reduction in their notional value).

So what is the most likely outcome? I remain skeptical about the seriousness of this whole enterprise. Without IMF support, Venezuela, with meager international reserves and a severe balance-of-payments constraint, simply cannot produce enough foreign currency for necessary imports, much less for servicing debt. This is a severe structural barrier. Venezuela needs a bailout, which can only come from the IMF.

IMF intervention is an impossible demand right now for Delcy Rodríguez. First, because it would imply fiscal austerity that would probably lead to social unrest for an already incredibly unpopular president with zero legitimacy. Additionally, the Washington Consensus has been a bête noire for chavismo since its inception, and would put her even more at odds with factions of her already fragile coalition.

Maybe there is a scenario where they will be able to negotiate some of the debt (probably in predatory terms for Venezuelans) with some liens or guarantees over oil assets. But considering the dire state of the country’s finances, the absence of the IMF from the process, the lack of any macroeconomic reforms that will enable the country to service debt again, and the “technical shortcomings” of the people running the show, even this seems unlikely.

The announcement of the debt restructuring was more of a gimmick to gain time—one of chavismo’s true gifts—by the Rodrigato to appease both the US and the naive bondholders who helped to put her in power. But, once again, there are no shortcuts to any meaningful change in the country’s economy that do not involve the now dreaded T-word: “transition.”