Ecuador to default on foreign debt

GUAYAQUIL, Ecuador, Dec. 13 (UPI) -- Ecuadorean President Rafael Correa says he will default on the country's foreign debt payments, declaring the loans tainted by criminal activity.

Correa issued a statement Friday saying he will fulfill a campaign pledge by not making a payment due to international lenders, citing a steep drop in remitted income from Ecuadorean expatriates living abroad. He also claimed there is evidence the country's previous governments had committed various crimes in selling the debt to bondholders such as pension funds, hedge funds and other overseas investors, The Washington Post reported.

The default could provide another jolt to already rattled emerging market investors in the United States and elsewhere, who have pulled billions of dollars out of the market sector in recent months.

Correa is holding back a $31 million interest payment after hinting earlier that the South American nation might make it. But speaking to reporters in Ecuador's commercial center of Guayaquil Friday, Correa said it would not be made and declared the country in default.

"We are ready to accept the consequences," a transcript of Correa's comments said, describing Ecuador's foreign debt as "immoral" and saying he would take the alleged criminal evidence to international courts.