- The Washington Times - Thursday, May 3, 2007

CARACAS, Venezuela — President Hugo Chavez yesterday threatened to nationalize Venezuela’s banks and largest steel producer, accusing them of unscrupulous practices.

“Private banks have to give priority to financing the industrial sectors of Venezuela at low cost,” Mr. Chavez said. “If banks don’t agree with this, it’s better that they go, that they turn over the banks to me, that we nationalize them and get all the banks to work for the development of the country and not to speculate and produce huge profits.”

It was not clear whether Mr. Chavez was referring only to Venezuelan banks such as Mercantil Servicios Financieros CA and Banco Provincial SA, or whether he also was aiming the threat at major international banks with subsidiaries in the country, such as Citigroup Inc. and Spanish banks Banco Bilbao Vizcaya Argentaria SA and Banco Santander Central Hispano SA.

Mr. Chavez also warned that the government could take over steel producer Sidor, which is majority-controlled by Luxembourgian company Ternium SA. Shares of Ternium fell 3.9 percent to $26.15 on the New York Stock Exchange after Mr. Chavez’s comments.

Sidor “has created a monopoly” and sold the bulk of its production overseas, forcing local producers to import tubes and other products from China and elsewhere, Mr. Chavez said.

“If the company Sidor … does not immediately agree to change this process, they will obligate me to nationalize it,” Mr. Chavez said.

“I prefer not to,” he added, as he ordered Mining Minister Jose Khan to depart immediately for the company’s headquarters and come back with a recommendation within 24 hours.

“Sidor has to produce and give priority to our national industries … and at low cost,” he said.

Mr. Chavez initiated a nationalization drive in January that is bringing the country’s largest telephone company CANTV and the electricity sector under state control. On Tuesday, the state oil company took over the last privately run oil operations in the country from major international oil companies and Mr. Chavez said his country would withdraw from the International Monetary Fund and the World Bank.

Mr. Chavez, a close ally of Cuban leader Fidel Castro, says the nationalization of “strategic” companies are part of Venezuela’s transition to a socialist system.

“I’m not deceiving anyone,” he said. “I’m only governing the country, and the country has elected me various times. … All of those who voted for me backed socialism, and that is where we are heading.”

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