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The Peruvian government has expelled Venezuela's ambassador as regional pressure built on President Nicolas Maduro's government for allegedly trampling his country's constitutional order. Peru gave Ambassador Diego Molero, a former Venezuelan defense minister, five days to leave the country. As part of what it said was a firm commitment "to help restore Venezuela's democracy,". Peru's administration also refused to accept a diplomatic protest made by Maduro over Peru this week hosting foreign ministers from 17 regional nations who refused to recognize the new, loyalist-packed special assembly that is to rewrite the constitution. The diplomatic action by Peru yesterday, which was the strongest yet from a Latin American government, came as the Trump administration weighed putting economic sanctions on Venezuela to punish Maduro for what Washington calls an illegitimate power grab. On Thursday, Trump said he discussed Venezuela along with North Korea and Afghanistan in a security briefing with top national security aides and Vice President Mike Pence. Pence is traveling to Colombia on Sunday to begin a regional trip that is expected to include discussions on how to deal with Maduro. "We had some very good meetings, some very good ideas, very good thoughts, and a lot of decisions were made," Trump said following the briefing, without providing any details. Maduro has tried to deflect the pressure from Washington, and on Thursday he said he wants to meet with Trump, perhaps next month at the United Nations General Assembly in New York. "Mr. Donald Trump, here is my hand," the socialist president told delegates at the constitutional assembly, adding that he wants as strong a relationship with the US as he has with Russia. But the apparent olive branch was undermined in the same speech by an angry rant in which Maduro accused Trump of being behind a failed attack on a Venezuelan military base early Sunday. The Trump administration in turn has called Maduro a "dictator" and imposed sanctions on him and more than two dozen other former and current Venezuelan officials. Reaction in Latin America has been far more subdued, reflecting long-held reluctance by much of the region to encroach on a neighbor's sovereignty and some lingering ideological affinity for the anti-imperialist revolution started by the late Hugo Chavez. Several attempts to punish Venezuela at the Organization of American States have failed due to a lack of consensus.
Peruvian President Pedro Pablo Kuczynski has been until recently a lonely exception in openly condemning Maduro. Meanwhile, Maduro's government has sent mixed signals about how much more confrontation it is willing to accept. This week, the government-packed Supreme Court ordered the arrest of two Caracas-area mayors for protecting protesters in their districts. And yesterday, Tarek William Saab, installed as chief prosecutor after the constitutional assembly ousted his outspoken predecessor, warned that he would reopen investigations against protesters for the use of violence and even destruction of trees used to build barricades at demonstrations. At the same time, the constitutional assembly yesterday said it would debate a proposal to push up to October elections for governors in all of Venezuela's states. It's a possible sign that the government is looking to negotiate a deal with the opposition, although many question if the constitutional assembly, which has a free hand to upend institutions, will even allow elections that were originally slated to take place last year will be allowed to go forward. Even as the US for now holds back applying economic sanctions, the Maduro government is finding itself increasingly isolated from financial markets. On Thursday, Credit Suisse bank said it banned trading in Venezuelan bonds over what it said were "recent development and the political climate" in the country, according to an internal memo. Venezuela is in the midst of a severe economic downturn caused by low oil prices and government policies that have scared away private investment. The country's bonds are one of the few ways the current government is able to raise money to support its collapsing economy. But as the country's political crisis has worsened, the bonds issued by the government as well as the state-owned oil company PDVSA have become a point of contention and concern for investors who increasingly worry they are supporting an oppressive regime as well as a country that is a great risk of defaulting on its debts. Goldman Sachs came under political pressure earlier this year for buying a reported USD 2.8 billion in Venezuelan bonds on the open market at a significant.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)