Rafael Correa, the leftist leader who governed Ecuador for a decade and defaulted on its debt, and his protégé in next year’s presidential election said they would reject the spending cuts requested by the International Monetary Fund as part of a loan deal.
“These austerity policies kill economies,” Correa said in an interview from exile in Belgium. “We’ll check all of this. We can’t continue with these IMF policies.”
The Washington-based institution agreed in August to lend Ecuador $6.5 billion, paving the way for the South American nation to restructure $17.4 billion of its international debt. Should Correa’s favored candidate, Andres Arauz, win the February election, his administration will focus on increased public spending and foreign investment, rather than repaying the IMF, the former president said. The comments raise the stakes in the vote as the government struggles to finance even the current level of fiscal expenditure.
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