Under Pressure From President Chavez, Venezuela's Banks Abandon Two-Month Strike

abcnews.go.com The Associated Press

Under intense pressure from President Hugo Chavez, Venezuela's banks agreed to abandon a 59-day-old opposition strike the latest sign the drive to force Chavez's quick ouster was unraveling.

Wednesday's decision came as the government nibbled away at the strike's core: a walkout that hobbled the oil industry, the world's No. 5 exporter.

Output surpassed 1 million barrels a day this week, a third of normal. Oil provides half of government income and 70 percent of export revenue.

Venezuela's National Banking Council said its members will return to normal operating hours on Monday. For two months, thousands of people have waited in long lines while banks opened just three hours a day.

"I think it's great," said Juan Pardo, 50, as he stood in line to cash a check. "It's time things returned to normal. We can't continue like this."

Management at shopping malls, restaurants, franchises and schools also planned to resume work Monday. Many strike supporters fear a popular backlash because of strike-related food, medicine and cash shortages. Others say they'll go out of business permanently if they stay closed.

Most small businesses never joined the strike, which began Dec. 2.

In a sign of growing resentment, banks in downtown Caracas were splattered with graffiti reading, "Banker thieves!" and "Coup plotters!"

"We owe the public," Nelson Mezerhane, the council's vice president, said after a Wednesday council meeting. "They have their earnings and money in our institutions."

Mezerhane refused to say how much banks lost during the strike.

Chavez applied heavy pressure. The president threatened to suspend directors at striking banks, fine them and withdraw the armed forces' deposits from private institutions.

But the president of Venezuela's main bank workers union spoke out against abandoning the protest. Fetrabanca president Jose Elias Torres said workers would hold an assembly Friday to decide whether to continue striking.

"The strike should continue," Torres said.

Opposition leaders insist the strike isn't over but appear to be relying more on international pressure to force early elections.

Labor, business and political parties called the strike to demand Chavez resign or call early elections. They argue Chavez's leftist policies have hobbled the economy and unleashed political violence.

Chavez, with the support of the armed forces, fought back.

He fired 5,000 strikers from the state oil monopoly, Petroleos de Venezuela S.A., eliminating dissent as he tries to consolidate government control over the semi-autonomous corporation.

Chavez sent troops to raid two private bottling plants, accusing them of hoarding products. He opened investigations that could lead to the shutdown of two independent television stations supporting the strike.

Venezuela's opposition vows to keep up the oil strike despite government progress in restoring production. Some 35,000 of the state oil monopoly's 40,000 workers walked out.

Opposition leaders were discussing future strategy Wednesday. They are gathering voter signatures to change the constitution and shorten Chavez's term from six years to four. Chavez's term runs until 2007.

Government and opposition leaders were studying proposals by former President Carter to end the impasse. Carter suggested either amending the constitution to shorten Chavez's term or holding a binding referendum on Chavez's presidency in August.

The strike has cost Venezuela more than $4 billion, and some analysts predict the economy will shrink by at least 25 percent in 2003 after an 8 percent contraction in 2002.

Responding to a panicky run for U.S. dollars, the government last week banned currency trading until it works out a way to sustain the bolivar without depleting foreign reserves. The bolivar has lost a quarter of its value against the dollar this year a major blow to businesses that rely on imports, and a country that imports most of its food.

On Wednesday, the government suspended import taxes on food for six months to ease the effects of exchange controls and strike-related shortages, state news agency Venpres reported.