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Chavez to rein in banks

Rory Carroll

Caracas: Venezuela's President Hugo Chavez said he might nationalise the banks and a major steel producer in the next stage of his socialist revolution.

Mr. Chavez said the state would take over the companies if they did not contribute more to the local economy, opening a new front in his campaign against international financial institutions.

``Private banks have to give priority to financing the industrial sectors of Venezuela at low cost. If banks don't agree with this it's better that they go, that they turn over the banks to me, that we nationalise them and get all the banks to work for the development of the country and not to speculate and produce huge profits.''

Mr. Chavez also said the Government might take over Sidor, a steel producer owned by the Luxembourg-based Ternium SA, because it exported most of its output, obliging local developers to import pipes. He ordered his Mining Minister Jose Khan to visit the company's headquarters and to report back within 24 hours.

``If they do not accept right now a change in the process, then they are going to force me to nationalise the company just as I did with [telephone company] CANTV.''

The announcements caught investors by surprise.

But the fact that the warnings were conditional, and that no formal deadline was set, prompted some analysts to suspect the President wanted the banks and the steel company to change their behaviour, but not necessarily to take them over.

— © Guardian Newspapers Limited 2007

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