Venezuela to be suspended from trade bloc over new assembly

South American trade bloc Mercosur is set to suspend Venezuela on Saturday over its violation of democracy after president Nicolás Maduro ignored its calls to halt the installation of a controversial new National Constituent Assembly.

The new body was due to be sworn in on Friday afternoon in the Federal Legislature Palace in Caracas where the opposition-controlled national assembly sits. Residents in the capital reported on social media that security forces had closed off roads around the building in preparation for the inaugural session.

On Thursday, public prosecutors vainly sought a court order to annul the new assembly because of alleged fraud in last Sunday's election. The president of Smartmatic, the company responsible for overseeing the vote, said the government had manipulated the results to boost turnout.

Mr Maduro said one of the first jobs of the new body will be to take over the justice system, a move that could see the last remaining independent prosecutors stripped of their powers.

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Election boycotted

All 545 seats in the new body will be controlled by allies of Mr Maduro’s populist Chavismo movement after the election was boycotted by the opposition. It claims the new body seals the country’s slide into dictatorship as its main goal was to replace the existing national assembly it took control of in 2015 in mid-term elections.

Early on Friday morning opposition leader Antonio Ledezma was unexpectedly released from prison. He had been removed from house arrest on Tuesday along with another former mayor of Caracas, Leopoldo López. More than 120 people have died in political violence in the country since the latest round of unrest broke out four months ago.

At a meeting in São Paulo on Saturday, the foreign ministers of Argentina, Brazil, Paraguay and Uruguay will discuss the activation of the Ushuaia Protocol that demands all members of Mercosur observe democratic norms and suspends those that do not.

Speaking ahead of the meeting, Argentina's president Mauricio Macri told local media: "We have to suspend [Venezuela] definitively from Mercosur. It is unacceptable what is happening in the country."

Venezuela only joined the bloc in 2012 in controversial circumstances.

It was temporarily suspended in December over its failure to incorporate its trade rules into national legislation. But it now faces being permanently suspended until it steps back from authoritarian rule. Mercosur does not have a mechanism for expelling members.

International calls

In a statement on Friday the Vatican joined the growing international calls for Mr Maduro to suspend the installation of the new body. It expressed its preoccupation with the "radicalisation and worsening of the crisis", which it said Pope Francis is monitoring closely. Last year he sponsored talks between the country's government and opposition that quickly broke down.

The deepening political crisis has provoked another dramatic drop in Venezuela’s currency against the dollar on the black market. The bolivar fell 18 per cent on Thursday, meaning it has lost 60 per cent of its value in the last month. Mr Maduro said on television his government would continue “the tough battle against speculators” and that he had ordered his interior minister to arrest anyone fixing prices based on the black market rate, calling those who did so “terrorists”.

Venezuela’s economy has shrunk 35 per cent since Mr Maduro came to power in 2013, and official mismanagement and corruption is widely blamed for a worsening shortage of food and medicines. With inflation expected to top 700 per cent this year, the cost of basic goods is beyond the means of many people.