Calling continued payments "immoral" and "illegitimate," Ecuador's President Rafael Correa followed through on pledges to default on the country's foreign debt Dec. 12, announcing his government will not make a $31 million payment due in two days on the 2012 Global Bonds series. This is Ecuador's second debt default in a decade. Ecuador's external debt totals $3.8 billion. The default comes after a national audit commission identified numerous irregularities in Ecuador's debt and recommended suspension of payments. Oil accounting for 60% of Ecuador's exports, and the recent slide in prices—from $147 a barrel to $45—has hit the country's finances hard. Win Thin, senior currency analyst at Brown Brothers Harriman, called the announcement "disappointing and a bit surprising." (EFE, MarketWatch, Dec. 12)

See our last posts on Ecuador, the econocataclysm and the struggle for global oil.

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