Honduras may face stiff U.S. sanctions

TEGUCIGALPA, Honduras - The United States is turning up pressure on the Honduran government installed by a coup - and the businesspeople who support it - warning that they will face severe sanctions if ousted President Manuel Zelaya is not restored to power.

Secretary of State Hillary Clinton called interim President Roberto Micheletti to say there would be serious consequences if his government ignored mediation for Zelaya's return. Her call Sunday came as talks mediated by Costa Rican President Oscar Arias stalled because of the refusal of Micheletti's delegates to accept demands for Zelaya's return.

State Department spokesman P.J. Crowley said that Clinton "helped him understand the potential consequences of a failure to take advantage of this mediation."

Honduran business leaders, meanwhile, say U.S. Ambassador Hugo Llorens has called them into meetings to warn that Honduras, impoverished and highly dependent on exports to the United States, could face tough sanctions if the interim government continued to refuse Arias' compromise proposal for Zelaya to return as head of a coalition government.

The European Union added to pressure yesterday by announcing it was suspending $93.1 million in Honduran aid.

Earlier this month, the U.S. government suspended $16.5 million in military aid and placed a hold on development aid expected to total about $180 million. But it has not yet threatened to cut off trade or remittances, a move analysts say could quickly bring down Honduras' economy.

No government has recognized Micheletti, and the United Nations and Organization of American States have called for the return of Zelaya, who was hustled out of the country by the army June 28. Zelaya angered many Hondurans by trying to hold a referendum on changing the constitution, which many saw as a bid to impose a socialist government.

Micheletti vowed yesterday to stay in power until the scheduled Nov. 29 elections. The United States has suggested it might not recognize that vote.

Business leaders, a key sector of support for Micheletti, also vowed to tough it out, hoping that the U.S. government is as wary as they are of Zelaya, who has aligned himself with leftist Venezuelan President Hugo Chavez.