Feb. 27 (Bloomberg) -- Several thousand anti-government demonstrators marched in Caracas today after President Nicolas Maduro tried to defuse two weeks of protests by granting Venezuelans an unexpected six-day holiday.
In the eastern Caracas neighborhood Chacao, an opposition stronghold, demonstrators held banners urging Venezuelans to ignore the holidays and take to streets to protest against crime, inflation and shortages of goods. As they attempted to block the city’s main east-west highway, national guards fired tear gas and used water cannons to break up the march.
Maduro this week expanded the annual Carnival festivities by decreeing today and tomorrow national holidays, in addition to the scheduled days off on March 3-4. At least 14 people were killed in the past two weeks in the biggest demonstrations against the government since Maduro won elections in April.
“This is a new dynamic; the country has changed,” Diego Moya-Ocampos, a political analyst at consultancy IHS Global Insight who spent two weeks with the protesters, said by telephone from London. “The economic crisis continues and these protests are not going away, though they will wary in intensity.”
Too many deaths have occurred for the situation to be defused by a week’s break, said Luis Vicente Leon, director of Caracas-based polling firm Datanalisis. The government will have to concede to some of the opposition’s demands and give the private sector a say in economic policy decisions, he said.
Maduro has said that his government is gaining support as daily traffic disturbances caused by the riots tire voters. Today, he also faced marches in the cities of Valencia, Puerto la Cruz, Puerto Ordaz, San Cristobal and Porlamar.
Maria Fernanda Riego, an economics student at the Caracas rally, said the appeal of the protests may be waning outside the middle-classes.
“We will keep fighting, but the majority might not,” she said. “Venezuelans are very fond of their holidays and this long Carnival is quite a temptation.”
Maduro, 51, heard from both critics and supporters at a 4 1/2-hour “peace conference” in Caracas yesterday that the main political opposition group skipped.
“Our country is not well, Mr. President,” Jorge Roig, head of the country’s main federation of business chambers, said as Maduro sat at a desk with the word “peace” spelled out by flowers in front of him. “We have economic indicators that show us with one of the highest inflation rates in the world, with enormous shortages.”
Other participants at the event included billionaire beverage magnate Lorenzo Mendoza, whom Maduro praised for suggesting the government create a commission to analyze the country’s economic situation.
Mendoza, chief executive officer of Empresas Polar SA, has faced criticism from Maduro and his predecessor, Hugo Chavez, both of whom said he was partly to blame for shortages of goods in a country with the world’s biggest oil reserves.
On the company’s Twitter page, Polar said it was willing to undertake actions to “contribute to national production and the well-being of the Venezuelan people.”
Opposition Governor Henrique Capriles, who lost to Maduro in elections to succeed Chavez last year, has called on the Catholic Church to serve as a mediator and insisted the government release jailed opposition leader Leopoldo Lopez, who was detained last week on charges of inciting violence.
While the extended vacation weekend may send thousands of Venezuelans to the country’s Caribbean beaches, Maduro will still need to offer concessions to extend any lull in the violence beyond the holidays, said Carlos Romero, a political analyst at the Central University of Venezuela in Caracas.
“It isn’t a magical solution,” Romero said in a phone interview. “It might reduce the number and characteristics of the protests, but that won’t mean Venezuela’s wounds are healed.”
Maduro declared the holidays this week to commemorate 25 years since the so-called Caracazo riots, when the armed forces killed hundreds after opening fire during protests against then-President Carlos Andres Perez’s austerity measures.
Amid the discontent, Maduro has taken steps to address a dollar shortage that has crimped imports, causing shortages of everything from chicken and cooking oil to medicine and paper.
Bank of America Corp. and Barclays Plc both changed their recommendations on Venezuelan bonds to overweight after the government published rules Feb. 24 allowing companies and individuals a new way to buy dollars in a regulated market.
Previously, the central bank was the sole supplier of greenbacks and as foreign reserves fell, less currency was made available to pay for imports.
Venezuela’s benchmark dollar bonds due in 2027 gained the most since June today, on news of currency reform and waning violence. The bond rose 2.85 cents on the dollar to 71.85 cents at 1:18 p.m. in New York.
The government also made moves to address complaints about police repression by arresting eight officers from the intelligence police, known as Sebin, over the murder of two people during protests on Feb. 12.
“The news coming out of Venezuela continues to be a cause for alarm,” European Union Commissioner Algirdas Semeta told the European Parliament in Strasbourg, France today. “We are deeply concerned by the continuing unrest.”
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