El Universal: Hugo Chavez' administration has opened the door to indebtedness without parliamentarian authorization.  On Wednesday, the Executive branch of government forwarded to the Finance Committee, National Assembly, a new message about borrowing in 2009. The need for additional funds to address fiscal management now stands at Bs.F 25 billion (US$11.63 billion), up from Bs.F 22 billion ($10.23 billion), which was the amount originally announced by President Hugo Chavez last Saturday, said Ricardo Sanguino, chair of the Finance Committee, National Assembly.

Thus, Venezuela's government has a free way to borrow up to Bs.F 37.32 billion (US$17.36 billion), out of which Bs.F 12.32 billion ($5.73 billion) will be borrowed under the Special Law on Borrowing, and additional Bs.F 25 billion ($11.63 billion) will be borrowed under the Law on Supplementary Borrowing. The final amount established in the reform of the Budget Law will remain unchanged at Bs.F 156.38 billion ($72.72 billion), as announced by Chavez.

Sanguino would not elaborate on the ordinary income items that were revised downward –a move that resulted in additional borrowing exceeding the amount the Venezuelan ruler disclosed last week. The lawmaker said that the new amount was estimated based on the need for resources to address social projects and the injection of funds for social programs, also known as missions. Another change the Finance Committee introduced to the Special Law on Supplementary Borrowing was the inclusion of some regulations under which the Executive branch of government has no obligation to seek authorization from the National Assembly for borrowing and debt repayment transactions.

The chair of the Finance Committee, National Assembly, added that the domestic banking system has enough resources to lend Bs.F 37.32 billion (US$17.36 billion) to the Venezuelan government. "There is an internal reserve in the financial system that not only will provide resources to the government but will also serve to finance the private sector," Sanguino said.

The public purse
On Wednesday, President Chavez also referred to the financial resources of Venezuela's banking system. He mentioned the legal reserve requirements (the share of clients' deposits that the Central Bank of Venezuela holds as collateral for specified deposit liabilities) as a way to obtain more resources. "I told (Minister of Economy and Finance) Ali Rodriguez Araque in a meeting that instead of talking exclusively of the international reserves, we could also talk of domestic reserves. All the funds deposited in the domestic public and private banking system, all the funds that the Central Bank has in its monetary reserves in bolivars (...) They (the governments before Chavez administration) would have never touched the monetary reserves," he said.

The burden of the new public borrowing in 2009 will be huge, to the extent that the issue of bonds will virtually equal the oil sector's contributions to the Treasury. Under the draft reform to the 2009 Budget Law, which will be discussed Friday in the National Assembly, financial authorities have estimated revenues at Bs.F 37.32 billion ($17.36 billion). Meanwhile, oil revenues will amount to Bs.F 37.82 billion ($17.59 billion) this year, according to the first report that President Chavez submitted to the National Assembly.

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