Ecuador president seeks US, European debt support amid war on gangs

QUITO (Reuters) – Ecuador’s president on Monday said he is seeking financial support from the U.S. and Europe, as well extending output from an oil block that was voted to be shut down, as he looks to free up funds to fight organized crime.

President Daniel Noboa, a 36-year old businessman who started his term in November, has launched a 60-day state of emergency, nighttime curfew and military offensive against criminal groups he has a designated as terrorists.

The escalating violence in the South American country, which saw gunmen storm a live TV broadcast early this month, comes as the economy is struggling to meet its domestic debt obligations, limiting its ability to borrow from overseas.

Top U.S. officials are visiting Ecuador this week to boost bilateral cooperation on security and fighting organized crime.

Noboa said in an interview with Teleamazonas TV channel that “refinancing the foreign debt” would be vital.

“It is important to have the help of the United States as well as Europe so that we are not financially strangled while we wage this war,” Noboa said, without giving further details.

Economy Minister Juan Carlos Vega is set to meet U.S. government bodies, multilateral organizations and investors this week to seek ways to finance social projects and boost the economy, his ministry said in a statement.

Noboa also noted that an option would be to postpone the closure of Amazon oil block 43-ITT, which is scheduled to shut down in August after an environmental referendum.

The block, operated by state-owned Petroecuador, produces around 55,000 barrels per day (bpd).

Noboa also announced a $1 billion cut to government expenses and said he supports a tax on profits registered by private banks over the past two years.

“It is essential to maintain a certain income until this pivotal time is over,” he said in the interview. “If we do not fight and fund ourselves we will lose the country.”

(Reporting by Alexandra Valencia; Writing by Sarah Morland, Editing by Louise Heavens)