Venezuela, Santander Group reach agreement on sale of bank

Venezuela, Santander Group reach agreement on sale of bankCaracas  - The Venezuelan government and the Santander Group have reached an agreement on the sale of the Bank of Venezuela, which was set to become a public bank in exchange for 1.05 billion dollars.

Venezuelan Vice President Ramon Carrizalez said Friday that negotiations on the nationalization of the bank were friendly and "mutually beneficial."

The Bank of Venezuela has a network of 286 offices around the country, and its acquisition would allow Venezuelan authorities to "strengthen the public financial system" and "strengthen the economy on the road towards socialism," though an increased support of agriculture, housing and energy, among others, Carrizalez said.

Carrizalez said payment was to be made in three installments: 630 million dollars on July 3, 200 million dollars on October 3 and 210 million dollars on December 30.

The deal was announced one day after the left-wing populist government of President Hugo Chavez said that five metal firms and one ceramics manufacturer were going to be nationalized.

The trade unions had complained that the workers of these firms had not been paid for at least six months, and that production had virtually stopped. Chavez argued that "social justice" required their nationalization.

Since 2007, the Chavez government has taken over firms and assets that are regarded as "strategically-relevant" for the construction of what he calls "21st-century socialism." These include banks, cement manufacturers, the communications company CANTV, Caracas electricity and oil-industry contractors.

Media reports estimated the weight of the state in the economy after the nationalizations at 29.5 per cent. (dpa)