Ecuador won't pay foreign debt interest, dubs it as illegal

Ecuadorian president Rafael Correa said Friday he will not pay interest on the nation's foreign debt which he dubbed as being illegal. Correa also said he was prepared to accept the consequences.

Correa made the comments about the interest payments as one of them became due this Friday. According to Correa, an American trained economist, he was studying how to challenge the debt, which he called "immoral and a betrayal of the country." This was a reference to the way the terms of the debt were originally set.

Correa pointed out that though the country had already paid $7 billion towards the payment of an original debt of $4 billion taken on during the 1980s, yet the principal remains about the same.

"If we have to confront international lawsuits, we will confront them and, I repeat, I assume all responsibility," he said. "I could not permit the continued payment of a debt that, in any light, is immoral and illegitimate."

The popular leftist economist said he would try to prove in international courts that the debt is illegal

Correa said he was preparing a restructuring plan to be presented to creditors within a few days.

A trained economist, he previously served as the country's finance minister under his predecessor, president Alfredo Palacio. He resigned from Palacio's government after the World Bank withheld a loan (citing the changes to the oil income stabilization fund).

When Correa resigned, polls showed he had the highest credibility of any official in the administration, with 57% of Ecuadorians saying that they trusted him.