The Daily Telegraph reported the European Union told the military-backed de facto Honduran government it was suspending about $90 million in aid to the Central American nation because it has not worked out a solution with ousted President Manuel Zelaya.
"This is a crisis which Honduras can ill afford," EU External Relations Commissioner Benita Ferrero-Waldner said after negotiations to resolve the leadership crisis stalled Sunday with the interim government, led by Roberto Micheletti, rejecting a compromise proposed by Costa Rican President Oscar Arias that would allow Zelaya to serve out his term.
Assistant Secretary of State Philip J. Crowley told reporters in Washington that U.S. Secretary of State Hillary Clinton for the first time had called Micheletti directly from India Sunday. Clinton, he said, encouraged Micheletti to focus on the negotiations being facilitated by Costa Rican President Oscar Arias, and reminded him of the potential economic and other consequences for Honduras if they should fail.
"I think it was a very tough phone call. However ... she made clear if the de facto regime needed to be reminded that we seek a restoration of democratic and constitutional order, a peaceful resolution," Crowley said. "We do not think that anybody should take any kind of steps that would add to the risk of violence in Honduras, and that we completely support the ongoing Arias mediation."
The United States, Crowley said, also has told Zelaya to stick with the mediation efforts and that he should not try to return to Honduras because it would escalate the tension and potential for violence.
Crowley said despite the apparent setback in talks, there may have been "greater progress than as at first evident," saying "a foundation was laid" for a possible resolution if talks resume this week, as expected.