Announcing the nationalisation of Banco de Venezuela, which will now be "put at the service of the people", Venezuelan President Hugo Chavez stated during a live televised broadcast on July 31 that it would be transformed into a "socialist bank".
Chavez insisted that "profits will not go to one private group, they will be invested in socialist social development".
That same day, on the last day that Chavez was able to use the powers granted for an 18-month period by the National Assembly for the president to decree laws, Chavez also decreed 26 wide-ranging reforms.
The package of laws, which deal with areas such as the banking, agriculture, public administration, and the armed forces, are aimed at deepening the government's pro-poor economic policies and strengthening popular participation in the political and economic sphere.
"Do you know who use to write the laws here?" asked Chavez, speaking at an event that same day to hand over resources to local communal councils. "Law firms paid by the national bourgeoisie, ambassadors wrote the laws ... the old law on banks, the private banks wrote it ..."
"Now it is the people who rule here and while Chavez is here it will be the people who rule, not the oligarchy."
New offensive
Together these two measures represent a new offensive by Venezuela's revolutionary government against corporate interests. It takes up, in different forms, elements of Chavez's proposed constitutional reforms, narrowly defeated in the December 2 referendum last year.
Those package of reforms were aimed at deepening the revolution and opening the path towards socialism by eliminating some of the pro-capital elements of the existing constitution (such as "autonomy" for the central bank and state promotion of the private sector) — as well as attacking the state bureaucracy (by incorporating the social missions, creating new power structures and restructuring the armed forces) and creating space for the expansion of popular power.
The defeat occurred largely due to the complexity of the reforms and the failure of the government, faced with a propaganda onslaught from the corporate media, to convince its mass base among the poor of the reform's importance. Another factor was discontent within the revolution's mass base about government inaction in the face of growing problems, including food shortages.
Close to three million people who voted for Chavez in 2006 abstained from the referendum.
Chavez stated after the defeat that he was obliged "to slow down the pace" of the revolution.
However, Chavez stated on August 2 that he was now "convinced that the political and economic conditions exist to go deep into the socialist revolution" because "we are stronger now".
"We must not for a second lose the impulse towards our goal" he added the following day, declaring that if neglected for a second, the impulse would be lost.
Bank nationalisation
The nationalisation of Banco de Venezuela followed the announcement by its Spanish owners, Grupo Santander, that they were in the process of selling it to a Venezuelan banker.
Venezuela law requires that all bank takeovers and mergers receive government approval.
Chavez ordered the government to not approve the sale and instead to negotiate its purchase. Although it attempted to argue it no longer wished to sell, Grupo Santander are now negotiating the buy-out.
Banco de Venezuela is one of Venezuela's four major banks that control 80% of the sector.
Over the last decade, the financial sector, until now mostly untouched by the government, has recorded massive profits as the Venezuelan economy has powered ahead. Last year, Banco de Venezuela earned US$170 million profits in the first half of the year, a 29% increase from the previous year.
The public banking sector will now represent 24.38% of deposits and 16.44% of credit loans. The number of public banking outlets will almost double to 633.
This greater public control will allow the government to have greater influence in directing loans towards promoting national development.
The nationalisation also comes following a "second wave" of government takeovers earlier this year in the steel, cement and food production industries. In early 2007, the government carried out nationalisations in the telecommunications, electrical and petroleum industry.
Law decrees
The major focus of the 26 law decrees is on increasing popular participation in all spheres.
While the "public administration law" gives legal recognition to the social missions, structures created outside the existing state bureaucracy to tackle the needs of the poor, it also facilitates the greater transfer of powers directly to the grass-roots communal councils.
A law on promoting the "popular economy" aims to help create a "a new system of production" that would include collective labour "based on non-alienated relations of production" and the promotion of social and collective property.
Four days before the decrees were announced Chavez had stressed the importance of building "communes", to which local communal councils would elect representatives, "because if there are no communes how do we transfer property?"
The "law of access to goods and services" allows for the government to expropriate all parts of the production chain of necessary goods, such as food, without the prior approval of the National Assembly, as has been the case until now.
Venezuela has suffered from food shortages partly caused by hoarding and speculation by capitalists seeking to break price controls and undermine the government.
Social participation in agricultural production via the communal councils is also guaranteed.
The "law on food sovereignty and security" also establishes that private and public agro-industry have to give preference to national agricultural producers, with the import of products only authorised when national production is insufficient. Exports are permissible once it has been determined that the internal market has been supplied.
In the military sphere, the new law on the National Armed Forces (FAN), incorporates the "national militias" into the now explicitly "Bolivarian" FAN. Chavez explained on August 3 that "it is not only the name that changed, it is a change in the structure of the armed forces".
A further twenty laws were foreshadowed to be discussed in parliament and in the communities.