EU-backed group calls for political solution to Venezuela crisis

By Malena Castaldi MONTEVIDEO (Reuters) - European and Latin American leaders met on Thursday to seek a peaceful and political solution to Venezuela's deepening crisis, while a U.S. admiral suggested socialist President Nicolas Maduro does not have the loyalty of many within his military. International pressure on Maduro to step down has intensified this week as a flood of EU members followed the U.S. move to recognise opposition leader Juan Guaido as interim president of the economically shattered South American nation. Russia and China continue to back Maduro and have warned Washington and others not to intervene. Holding its inaugural meeting in Uruguay's capital Montevideo, the European Union-backed International Contact Group on Venezuela called for a more hands-off approach than that advocated by the United States and some other Latin American nations. The EU's foreign policy chief, Federica Mogherini, said the group, launched late last month, was pushing for a peaceful and political solution, adding that a resolution ultimately must come from the people of Venezuela. "This is not only the most desirable result but is the only result if we want to avoid more suffering and a chaotic process," Mogherini said in Montevideo alongside Uruguayan President Tabare Vazquez. "The biggest dilemma facing Venezuela is between peace and war, which is why we are insisting in our call for calm from the parties involved and the prudence of the international community," Vazquez said. In power since 2013 and re-elected last year in a vote critics have called a sham, Maduro has presided over an economic collapse marked by widespread shortages of food and medicine and hyperinflation. An estimated 3 million Venezuelans have left the oil-rich OPEC-member country. The group meeting in Montevideo said it wants a process within 90 days in which Venezuelans determine their own future through free elections. Some critics have said this stance could let Maduro off the hook. EU member states in the group include France, Germany, Italy, the Netherlands, Portugal, Spain, Sweden and Britain. Latin America members include Bolivia, Costa Rica, Ecuador, Mexico and Uruguay. Maduro, who calls Guaido a U.S. puppet seeking to foment a coup, has maintained power with the backing of Venezuela's military, though the opposition leader has asked the military to side with the forces of democracy. In Washington, Navy Admiral Craig Faller, head of the U.S. military's Southern Command, told the U.S. Senate Armed Services Committee that the majority of Venezuela's 2,000 generals were loyal to Maduro because of the wealth they amassed from drug trafficking and petroleum and business revenue. But Faller said rank-and-file soldiers were starving "just like the population." "The legitimate government of President Guaido has offered amnesty, and a place for the military forces, most of which we think would be loyal to the constitution, not to a dictator, a place to go," Faller told the hearing. Faller said the U.S. military is prepared to protect American personnel and diplomatic facilities in Venezuela if needed, though he did not provide any details. 'THIS USURPATION' Guaido has galvanized the opposition since taking over as head of Venezuela's National Assembly in January. Last month, he declared himself interim president, opening the door for Washington and others to recognise him as the legitimate leader. "Naturally I appeal to all of those who can help us ... to help put an end to this usurpation of a transition government, and bring truly free elections to Venezuela as soon as possible," Guaido told the Sky24 television channel in Italy. On Monday, the so-called Lima Group, which includes Canada, Brazil, Argentina and other nations that have taken a harder line towards Maduro but not the United States, encouraged international pressure to force Maduro to step down. The International Monetary Fund, which a new government in Caracas would likely call on for financial assistance, is awaiting guidance from its member countries on whether to recognise Guaido, IMF spokesman Gerry Rice said on Thursday. "I think countries are still establishing their positions in terms of recognition," Rice told a regular news briefing. Some nations, including participants at the meeting in Uruguay, remain wary about getting too directly involved in the Venezuela's dispute. On the eve of the meeting, Mexico, Uruguay and a grouping of Caribbean countries presented a plan for Venezuela, titled the "Montevideo Mechanism," that calls for a peaceful solution that will prevent an "escalation of violence." Mexico, once an outspoken critic of Maduro, also is urging negotiations to end the crisis. Ties with Venezuela have warmed under leftist Mexican President Andres Manuel Lopez Obrador, who invited Maduro to his inauguration last month. (Additional reporting by David Lawder, Idrees Ali and Phil Stewart in Washington; Adam Jourdan in Buenos Aires and Steve Scherer in Rome; Writing by Paul Simao; Editing by Will Dunham)