Barclays Capital maintains its scenario of significant possibility of a political transition in Venezuela in 2025. It argues that there are important factors that could force changes in the country. He considers that Nicolás Maduro is in “a vulnerable position” and at high risk of not being recognized internationally as head of state. While the Venezuelan opposition predicts a “critical period” in January
The British Barclays Capital maintained in a recent report the possibility that a political transition will occur in Venezuela in 2025. The company maintains its scenario of changes for the country which has been argued in previous reports, by arguing that there are still factors that could drive them.
«Recent events signal an intention to continue with efforts to cause a transition in Venezuela, among them: the United States recognizes Edmundo González Urrutia as president-elect, who speaks of having a plan to return to the country, the appointments of president-elect Donald Trump , frictions in the ruling coalition and calls for the mobilization of the people”, stood out Barclays.
He pointed out that the ruler Nicolás Maduro does not seem to give up power after the accusations of electoral fraud on July 28, which leaves him in a vulnerable position and with a high risk of not being recognized internationally as head of state.
«Although Maduro has shown no willingness to give up power after the July 28 elections, he has been left in a very vulnerable position. Sanctions alone are not enough to generate change, but they could increase the cost of maintaining the status quo, “potentially opening a space for the mobilization of people that could put the cohesion of the regime under scrutiny or force a negotiation,” the financial services company stated.
He added that “as inauguration day approaches on January 10, Maduro appears unlikely to receive international recognition. Although the transition is narrow and uncertain, underlying conditions suggest that the window of opportunity for a transition remains open.
Barclays also indicated that another factor that would force a transition is the review of the licenses granted to foreign oil companies operating in Venezuela (Chevron, Eni and Repsol), so a potential revocation is likely to increase pressure on the bolivar and inflation. They assure that the country can return to the policy of controls (prices and exchange rates) “and to more hostile policies, “Threatening even sectors that have been cooperating with their government.”
In his opinion, there is another window open for change in the country: Maduro’s partner governments could be thinking about the need to end the political and institutional crisis in Venezuela. “What could be the difference this time? Fatigue among Maduro’s allies due to their poor ability to lead the country to normalization; as well as the offer of guarantees that could generate incentives for defections, while the support of geopolitical elites is weakened.
On the other hand, Barclays indicated that in 2024 Venezuelan and PDVSA bonds have been among the worst performing securities in the EM (Emerging Markets) index, as investor pessimism about the prospects for a political transition have depressed the prices. In this sense, they recommend selling Pdvsa 6% 2024 and Pdvsa 6% 2026.
“The next three to four weeks will be a critical period for the Venezuelan opposition to mobilize, for the regime in Caracas to remain cohesive, and for the incoming US administration to apply diplomatic pressure. Our view remains that The transition is the clearest path to debt restructuring and potentially the best outcome for debtors. Although there is an open debate about who might be more willing to pay, we think that the country’s ability to pay in a transition would be greater,” the British company argued in its report sent this week to its clients.
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