The US and Canada recognised Venezuelan opposition leader Juan Guaidó as the country’s interim president on Wednesday in a direct challenge to the regime of Nicolás Maduro.
The apparently co-ordinated move, swiftly joined by Brazil, Colombia and other Latin American countries, came as Mr Guaidó swore himself in at an ad hoc ceremony in Caracas, while opposition supporters staged mass rallies throughout the country.
Mr Maduro began a second term as president two weeks ago. The EU and more than 20 countries, including the US, Canada and some of Latin America’s biggest states, said they did not recognise that inauguration following elections last year widely regarded as fraudulent.
In a statement released by the White House, President Donald Trump encouraged other governments to work with Mr Guaidó, the president of the Venezuelan National Assembly, as Venezuela’s true leader and help him “restore constitutional legitimacy” to the country.
“I will continue to use the full weight of United States economic and diplomatic power to press for the restoration of Venezuelan democracy,” Mr Trump said. “We continue to hold the illegitimate Maduro regime directly responsible for any threats it may pose to the safety of the Venezuelan people.”
Mr Maduro responded by saying he was breaking off all diplomatic and political relations with the US, which he accused of trying to foment a coup. He gave US diplomats 72 hours to leave the country. But the state department later said that as it does not recognise the Maduro regime, the US “maintains diplomatic relations with Venezuela and will conduct our relations with Venezuela through the government of interim President Guaido, who has invited our mission to remain in Venezuela”.
So far, the military has held firm in its support of Mr Maduro. But there is increasing talk that Washington may increase the economic pressure to encourage defections among the rank and file who may doubt the constitutionality of Mr Maduro’s presidency.
When asked whether he would consider military action, Mr Trump repeated on Wednesday that “all options are on the table”.
Donald Tusk, president of the European Council, said in a tweet that he hoped “all of Europe will unite in support of democratic forces in Venezuela. Unlike Maduro, the parliamentary assembly, including Juan Guaidó have a democratic mandate from Venezuelan citizens.”
In Caracas, Mr Guaidó declared himself interim president in a defiant speech before masses of anti-government protesters. The country is gripped by hyperinflation and a crushing economic crisis that has seen more than 3m refugees flee.
Mr Guaidó, 35, repeated his calls for the military to abandon the Maduro regime, saying they would be pardoned by a future government if they did so.
“We know that this will have consequences,” he told a cheering crowd, holding his right hand aloft as he took the oath. “To be able to achieve this task and to re-establish the constitution we need the agreement of all Venezuelans.”
Mr Guaidó’s anointment came as thousands marched through the streets of Venezuela to demand Mr Maduro’s resignation on the highly symbolic 61st anniversary of the coup d’état that ended the military dictatorship of Marcos Pérez Jiménez.
“This regime has been in power 20 years and I’m 21-years-old. It’s marked my whole life,” said Nancy Vargas, dressed in a green T-shirt with the picture of a helmeted protester emblazoned across it. “It’s robbed me of my youth but it hasn’t taken away my desire to fight for my country.”
The country’s bishops have described the government’s insistence on clinging to power as “a sin that cries out to heaven”. In Caracas’ El Paraiso neighbourhood, church bells rang out in support of the protesters and a demonstrator stood atop the Coromoto chapel waving a red, blue and yellow Venezuelan flag.
There were also multiple reports of sporadic clashes, with military police using tear gas to disperse crowds.
The government responded with smaller protests of its own, with red-shirted supporters bussed into Caracas to swell numbers. Speaking at one rally, Diosdado Cabello — widely viewed as the second-most powerful figure in the ruling socialist party — dismissed the government’s opponents as “fascists”.
“They know that under the terms of the constitution they can’t do what they’re doing,” he said. “The Bolivarian revolution has no sell-by date. We don’t care what the empire [the US] says. We don’t care what the European Union says.”
But David Smilde, a Venezuela expert at Tulane University in the US, said the decision by the US, Canada and others to recognise Mr Guaidó had serious practical implications for the Maduro government and were less symbolic than first appeared.
“It could lead courts in the US and elsewhere to give control to Venezuela’s foreign assets to the [opposition-dominated] National Assembly instead of the Maduro government,” he said.
One group of bondholders holding defaulted Venezuelan debt has already said it would not talk to the Maduro government and would only deal with Mr Guaidó’s freely elected National Assembly, regarded by many as Venezuela’s last bastion of democracy.
Hopes of regime change saw prices for Venezuela’s bonds jump to their highest level in months on Wednesday. The country’s benchmark 2027 bond traded at a six-month high of 31 cents on the dollar, up from 28 cents a day earlier and 32 cents at the end of November.
Bonds issued by the state oil company Petróleos de Venezuela also rallied to their highest in more than seven months, with the 2026 note trading at 24 cents on the dollar.
Wednesday’s demonstrations followed two days of sporadic anti-government protests in Caracas, triggered by an insurrection by military police officers.
The government quickly quashed the mutiny in the poor neighbourhood of Catiza, arresting 27 officers and accusing them of treason, while resulting riots killed at least one person. Demonstrators burnt tyres and set fire to cars, calling for Mr Maduro to go.
“Should unrest in government strongholds continue and broaden, it would materially increase the potential for a political transition,” said the Eurasia Group.
The US has already deployed financial sanctions and targeted reprisals against Venezuela. A senior US official said Washington had “not even scratched the surface” when it came to potential measures — especially if the Maduro regime harmed National Assembly members.
The most extreme potential actions include banning the purchase of oil that the country sells to the US. US oil refineries imported an average of 500,000 barrels a day of Venezuela’s heavy, high-sulphur “sour” oil in the first 10 months of 2018
Alternatively, the US could bar the sale of diluents and other chemicals that Venezuela needs to mix with its otherwise unmarketable heavy crudes.
Venezuelan oil production has collapsed by more than half over the past 18 years to just over 1m barrels per day. The steep fall in the oil price over the past three months has reduced fears of a damaging price jump should the Trump administration take action against Venezuela’s oil industry.
