Analysis

For months it has been speculated that the government would delay a recall referendum on Maduro by exerting pressure on the National Electoral Council (CNE). Pushing the date of a recall back to 2017 would mean no fresh presidential election in the likely event voters back a petition forcing Maduro to stand down.

January 10, 2017 is the important cut-off date. After then, the vice-president would complete the remainder of the presidential term through to 2019 if the recall goes against Maduro.

Judicial jousting

Earlier this month the CNE realised pessimistic expectations by announcing that although the preliminary recall step requiring the MUD to collect 20% of signatures could go ahead in October, it would be unable to validate signatures and -- if necessary -- organise a referendum before April 2017.

Further impediments to the signature drive included:

• a re-interpretation by the Supreme Court of the constitutional requirement for signatures, implying that 20% of voters in each of Venezuela's 23 states must support the referendum -- not 20% of the electorate nationally as was the case during the 2004 recall against late President Hugo Chavez;
• a window of just three days for signatures to be collected; and
• the provision of only 5,400 CNE signature verification machines, compared with 20,000 requested by the MUD.

As the MUD geared up for the signature drive across 23 states, the Supreme Court upheld a decision from regional courts in Aragua, Bolivar, Carabobo and Monagas states to halt the process.

This followed complaints from state governors -- all from the PSUV -- that more than 300,000 signatures collected during the preliminary recall phase (held in April-May) were unverified (see VENEZUELA: Peaceful protest takes momentum from Maduro - September 2, 2016).

In response to the ruling, the CNE postponed the next phase of signature collections.

There was a further revision of the election calendar, with the CNE announcing that state governor elections scheduled for December 2016 will also be postponed to April 2017. No salient justification was provided for the change, which -- as with the postponement of the recall process -- split the CNE.

Institutional conflict

State institutions -- particularly the Supreme Court -- have moved to centre stage in the ongoing political and constitutional conflict between the PSUV and the MUD (see VENEZUELA: Institutional conflicts foreshadow dead end - August 5, 2016).

Earlier in October, the Supreme Court ruled that owing to prior deliberation in Citizen Assemblies, the government could bypass National Assembly consideration and approval of Maduro's 8.5-billion-dollar 2017 budget, of which nearly three-quarters is planned for social programmes.

The 2017 budget, which looks unrealistically to an increase in domestic tax and state company contributions to offset the fall in oil export revenues, will be analysed by a Supreme Court audit committee.

To justify this circuitous route, the government cited the failure of the National Assembly to convene on 25 occasions, and the legislature's illegitimacy due to the presence of three opposition representatives under investigation for irregularities in December's elections.

In a move interpreted as a further distraction from pressing current concerns, the Supreme Court has ordered an investigation into the disappearance of a law student during the country's left-wing insurgency in the late 1960s. Re-examination of the case, closed by a military tribunal in 1968, is in the broader context of investigations by a government-convened Truth and Justice Commission that has highlighted more than 11,000 cases of state violence under the historically dominant and currently resurgent Democratic Action (AD) party.

The CNE is responsible for ensuring that the signature collection process and the state governor elections are clean and fair. Long-term prospects for peace and stability are contingent on Maduro and the PSUV accepting that they have been legitimately removed from office through the popular vote.

Nevertheless, the CNE has demonstrated a lack of technical capacity -- and institutional willingness -- to administer election processes in a competent and timely manner. In conjunction with the intervention of the Supreme Court and bypassing of the National Assembly, this will impel the MUD to mobilisation and protest on the street, heightening contestation of public and political space and in turn elevating the risks of acute political violence.

Regime change?

Pronounced domestic instability has increased expectations of sudden regime change in Venezuela, including through MUD appeals to the military to intervene.

It is highly unlikely that the armed forces, which command a sizeable role in the Venezuelan economy and government, will publicly step into the wide breach between the government and the opposition -- and certainly not to benefit the opposition (see VENEZUELA: Military missions may deepen malaise - July 21, 2016).

However, the growing chaos strongly favours the military faction within the deeply factionalised PSUV. The possibility that the armed forces will pressure for Isturiz to be replaced by a military officer, thereby creating the possibility of a transitional military figure completing the remainder of Maduro's term, cannot be ruled out.

Outlook

Against this backdrop, prospects for dialogue led by the South American Union (UNASUR) group of countries and now supported by the Vatican look much diminished.

The MUD has little to gain from participating in a process that it believes serves only to keep a crumbling PSUV in power. Conversely, leading PSUV officials, including Maduro, will not countenance any surrender of office as this may increase their vulnerability to prosecution.

This deepening turmoil has made for a toxic environment for PDVSA's proposed swap of 5.3 billion dollars in 2017 bonds for 2020 maturities -- an offer that has now been extended until October 28 (see VENEZUELA: PDVSA swap will not halt default fears - September 22, 2016).

This will have severe ramifications for PDVSA's capacity to make 4.6 billion dollars in debt payments through November 2. The potential for default and a worsening of the already severe economic crisis compounds an already negative and alarming outlook.