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. Last Updated: 07/27/2016

Chavez Rattles Saber at Steelmaker

NEW YORK TIMES SERVICE

CARACAS, Venezuela -- President Hugo Chavez is deepening efforts to assert control over the economy by dictating changes to the operations of a large Argentine-controlled steelmaker and threatening to nationalize banks controlled by financial institutions from the United States and Spain.

Markets here are reacting with distress to his latest moves. The main index of the Caracas stock exchange fell 2.7 percent Friday, while Venezuela's currency, the bolivar, also weakened about 3 percent in unregulated trading as rich Venezuelans rushed to take money out of the country.

The announcements by Chavez are part of a broader project to reconfigure Venezuela's economy to strengthen worker-led cooperatives and state enterprises. Chavez is also trying to build regional financing alternatives to the International Monetary Fund and the World Bank, to be financed largely by his government.

Chavez dressed down the foreign owners of steelmaker Siderurgica del Orinoco over the weekend, asking them to halt exports and focus on meeting domestic demand. The company, also known as Sidor, is controlled by Techint Group of Argentina. Chavez said he had summoned Paolo Rocca, the company's chairman, to Caracas for talks.

"I'll grab your company," Chavez said to Rocca on Saturday at an event celebrating the creation of a single Socialist party among his followers.

"Give it to me, and I'll pay you what it's worth," the president said. "I won't rob you."

Chavez had threatened on Thursday to nationalize Sidor and to take over the banking system unless banks agreed to offer low-cost financing to domestic industry.