Monday, November 19th 2012 - 12:22 UTC

Latin America pledges support for Spain but warns austerity only deepens the crisis

Latin America pledged investment opportunities for recession-hit Spanish and Portuguese companies but warned its former colonial masters drastic cost cutting would only deepen their misery.

President Dilma Rousseff and Brazil’s 2.5 trillion dollars economy were the stars of the meeting

The economic plight of Iberia dominated a two-day summit of leaders from Spain, Portugal and Latin America in the southern Spanish city of Cadiz - a principle port for Spanish galleons loaded with riches in the days of empire and the city that elaborated the first liberal constitution.

In a reversal of fortune, Spain and Portugal are now banking on Latin American markets to get them on the road to recovery.

Brazilian President Dilma Rousseff was the star of the meeting because of hopes consumer demand and public building projects in her country's 2.5 trillion dollars economy will create opportunities for Iberian companies, from energy to retail.

“We have also been hit by the crisis because of the slowdown in international markets but we are widening public and private investment in infrastructure” Rousseff told fellow leaders at the summit, which ended on Saturday.

Latin American countries are all too familiar with the type of fiscal crisis that Portugal and Spain are now going through. Over past decades they went through boom-and-bust cycles, and devaluations and austerity programs monitored by the International Monetary Fund.

“Don't commit the same errors we did,” said Ecuadorean President Rafael Correa, warning austerity may worsen recession.

In the 1980s and 1990s, Spanish tycoons built up business empires in Latin America in what is known as the “Re-conquest.”

Spain's biggest companies, from banking groups Santander and BBVA to technology firm Indra and Telefonica, are increasingly dependent on Latin American revenue as domestic operations slump.

Angel Gurria, secretary general of the OECD group of wealthy nations, said Latin America has new opportunities for Spanish investment in infrastructure, technology and education. But Latin America also holds risks for Iberian firms.

Prime Minister Mariano Rajoy said Spanish companies needed an environment of legal certainty in Latin America, referring to nationalisations in Venezuela and Argentina.

Argentine President Cristina Fernandez did not attend the summit this year, which takes place during a dispute over Argentina's nationalisation in April of YPF, a unit of Spanish oil major Repsol.

Leaders of Venezuela, Paraguay, Uruguay, Guatemala, Cuba and Nicaragua were also absent. Still, attendance at this year's summit was better than last year when only half of the members showed up, raising serious questions over the event's relevance.

Portugal was rescued last year by Europe after it risked defaulting on public debt and now Spain - the Euro zone's fourth biggest economy - is on the brink of needing aid. They are both in deep recession, while Latin America is seen growing 3.2% this year by the OECD and more robustly in 2013.

A quarter of the Spanish workforce is jobless, and over 50% of those aged 16/28. Hundreds of thousands of workers and unemployed marched on Wednesday in both countries protesting budget cuts. Many Spaniards and Portuguese are again migrating to Latin American as did their grand parents and many more before them.
 

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1 Chicureo (#) Nov 19th, 2012 - 12:59 pm Report abuse
With the exception of China and Venezulea, I cannot imagine anyone investing in Argentina under the current circumstances, but then again, CFK keeps surprising every owns.
2 ChrisR (#) Nov 19th, 2012 - 01:32 pm Report abuse
”Don't commit the same errors we did,” said Ecuadorean President Rafael Correa, warning austerity may worsen recession.

Mmm. Would that be the error he made when he had the Policia fire on his own citizens while he was hiding in a hospital and then tried to have the owner of the paper who reported it jailed?

Does anyone with half-a-brain think listening to this prat is what anybody should do.

Imagine your own situation: you are deeply in debt to whoever and then you want to double the debt by not cutting back your outgoings. Bunch of looney-toons most of this gathering.
3 Gordo1 (#) Nov 19th, 2012 - 01:39 pm Report abuse
““Don't commit the same errors we did,” said Ecuadorean President Rafael Correa, warning austerity may worsen recession.”

He is ruling his country in such as disastrous way and now he is giving “expert” advice to Spain and Portugal. What a joke!
4 Idlehands (#) Nov 19th, 2012 - 02:28 pm Report abuse
Spain doesn't have a great deal of choice when it comes to the austerity program. It is a member of the Euro and is therefore very restricted in what it can do.

If it can't meet it's debt payments it will need to ask for a bailout - and that comes with austerity attached.

If it needs a bailout but refuses austerity then it would probably need to leave the Euro.
5 jkw (#) Nov 19th, 2012 - 02:53 pm Report abuse
Idlehands@4#

Spain and Portugal have a great choice: get on their knees for Germany (1936-1937 ring a bell?) or work together with the the best economic hopes for the world during the next century--the Latam nations.

The US, a natural and most obvious partner of Latam nations, has so allowed the ensconcement of banking and corporate elites at the helm of Washington, that it long ago lost any credibility in South America by virtue of supporting and carrying out through predatory loans and aid and active military intervention the banking and corporate elites agenda of control by corruption of dictatorial leaders and demonization of populist opposition.
6 Idlehands (#) Nov 19th, 2012 - 03:29 pm Report abuse
5 jkw

Okey dokey
7 Troy Tempest (#) Nov 19th, 2012 - 03:31 pm Report abuse
@jkw

Why don't you just give us the link to the online Kirchnerist Users Manual (KUM), instead of repeating the doggerel, verbatim ?
8 Condorito (#) Nov 19th, 2012 - 03:37 pm Report abuse
Being lectured by Correa is humiliating and well deserved.

The Coños got us off to a disastrous start 500 years ago and did nothing between then and now to help us up. They have scraped along the bottom, between Europe and the 3rd world for decades now. Their “economic miracle” of the 90s was fuelled by low interest rates following monetary union with Germany, which they squandered on allowing feel-good bubbles to inflate.

Now they are paying the price for being a bunch of arrogant good-for-nothings. Leave them to their fate lest they remember what an honest day’s work is.
9 Anbar (#) Nov 19th, 2012 - 06:09 pm Report abuse
“”“”Spain and Portugal have a great choice: get on their knees for Germany or work together with the the best economic hopes for the world during the next century--the Latam nations. “”“”

Well, Brazil and... erm.... Brazil...or... maybe... Brazil.

- - - -

“”“”“”Argentine President Cristina Fernandez did not attend the summit this year, which takes place during a dispute over Argentina's nationalisation in April of YPF, a unit of Spanish oil major Repsol.“”“”“”

“”“.....or work together with the the best economic hopes for the world during the next century--the Latam nations. ”“”“”“”

Yeah, that'd be just Brazil then.... still......

- - -

“”“”Now they are paying the price for being a bunch of arrogant good-for-nothings. Leave them to their fate lest they remember what an honest day’s work is.“”“”

FEEL THE LOVE!?

Brazil it is then......

arf arf
10 Nostrolldamus The 2nd (#) Nov 19th, 2012 - 06:16 pm Report abuse
“Their “economic miracle” of the 90s was fuelled by low interest rates following monetary union with Germany, which they squandered on allowing feel-good bubbles to inflate. ”

That describes perfectly the UK and US economies in the 2000s. What the heck did they produce during those years of growth?

Nothing.

It was all a banking (fraudulent) and real-estate (mostly fraudulent) bubble. Their growth was based on nothing, and that's why now they can't get out.
11 Troy Tempest (#) Nov 19th, 2012 - 06:58 pm Report abuse
@10 nasal Troll

we're not talking about the UK and US.

This topic is about Spain wanting a return on the cooperation they gave Argentina and South America, in the past.
Perhaps some money back from their investments?
Like Repsol being compensated for the “nationalisation” (theft) of YPF, by Argentina.

Tell us about Argentina's “economic miracle”.
- tumbling real estate market
-27% inflation
-food shortages
-power cuts and failing infrastructure
-unemployment

and best of all,
-RIOTING IN THE STREETS
12 Think (#) Nov 19th, 2012 - 07:20 pm
Comment removed by the editor.
13 Ayayay (#) Nov 19th, 2012 - 07:44 pm Report abuse
@8 Condorito, YUP.

@NosTTT, they didn't get HISTORICALLY low interest, aka FREE MONEY :) by earning it on their credit history. They did it by using the original E.U. member's credit history.

The U.S. has the lowest interest rates in the world because (..some Korean businessman said this..) it's the most stable country.
Combined with it's always kept it's promises.

www.investopedia.com/financial-edge/0911/7-things-you-didnt-know-about-sovereign-debt-defaults.aspx#axzz2ChMazZaA
14 briton (#) Nov 19th, 2012 - 07:48 pm Report abuse
Boy what humiliation for these two countries,

Still
They could both just jump in the microwave and end it all,
And leave Gibraltar alone,
.
15 Ayayay (#) Nov 19th, 2012 - 07:50 pm Report abuse
@14 lol
16 Condorito (#) Nov 19th, 2012 - 07:53 pm Report abuse
@10
Tobias,
“That describes perfectly the UK and US economies in the 2000s”

To some extent. The difference is that post-popped bubble Spain has nothing but tourism and a few assembly plants, whereas post-bubble US and UK still have high-tech industry and their educational establishments lead the world in every scientific and technological field.

This fact bares itself out in the exodus of Spanish engineers (from Spain) and the current shortage of engineers in the US and UK.

PS: I like the recent poetic posts.
17 MurkyThink (#) Nov 19th, 2012 - 07:59 pm Report abuse
16
I remember you said from Chile, right ?
Where are you from in Chile ?
I know this country ,would you want converse with me on it.?
18 Condorito (#) Nov 19th, 2012 - 08:23 pm Report abuse
Murky
La Provincia de Elqui.
Converse away.
19 Troy Tempest (#) Nov 19th, 2012 - 08:52 pm Report abuse
@12 think

“Comment removed...”

LOL
20 Ayayay (#) Nov 19th, 2012 - 08:55 pm Report abuse
@10, ohh, just the Internet, Microsoft, Google, Facebook, Apple. The U.S. is also the world's second largest manufacturer of hard stuff (like Boeing airplanes). We use less workers, because we use ROBOTS.
21 Troy Tempest (#) Nov 19th, 2012 - 09:07 pm Report abuse
@20 ayayay

Be fair, Ayayay - La Campora USES robots too!!
22 Condorito (#) Nov 19th, 2012 - 09:13 pm Report abuse
My suppliers in Argentina have just informed me that the whole country is on strike tomorrow: transport, banks, hospitals (all but emergency), gas stations, all public offices...there will also be the usual road blocks to stop those who would otherwise like to work.

How come no story on MP yet???
23 Ayayay (#) Nov 19th, 2012 - 09:35 pm Report abuse
@16 & @10 I also agree the new poesy is nice, Nostrolldamus II (Condorito notices these things)
24 Condorito (#) Nov 19th, 2012 - 09:43 pm Report abuse
Ayayay - seems you notice too. El Troll Nostro is undeniably a talented composer of prose.
25 Troy Tempest (#) Nov 19th, 2012 - 10:37 pm Report abuse
@22 Condo

International travel advisories about the General Strike, are all over the internet.

Here's one: http:

//www.lonelyplanet.com/thorntree/thread.jspa?threadID=2274116

funny comment on there, though - 'how can you tell General Strike from Business As Usual?”

:-D
26 Anbar (#) Nov 19th, 2012 - 11:18 pm Report abuse
To be fair to Argentina it *could* become an agricultural superpower.... if it can sort out its love-affair with semi-despotic-self-hating-governments.

Brazil is clearly in a league of its own, industrially, but still has a long way to go and will, certainly, be a major power eventually.

Chile seems to be quietly & steadily going onwards & upwards, but without the land-mass & natural reserves of Brazil & Argentina...

It should be pretty obvious to everybody that *growing nations*, by which I mean those who are not even close to fulfilling their maximal potential of inhabitants i.e. they have space to grow into, will eventually catch up with those already stuffed-to-the-gills like the UK & Germany, japan etc.... but then who the heck, & where the heck, does everybody grow the food needed for them all?

canada, aus, brazil... argentina...?

We’ve already fished the seas into oblivion so land-based crops is all we've got left... and they need land.

Anyway, Argentina wont get there with the sorts of governments it currently has, and seems inexorably & irrevocably entwined with...rarely for its own betterment.
Until its political scene matures its going to stay lurching from one disaster to another…mostly self-generated (despite the hired-hands paid to say otherwise on fora).
27 British_Kirchnerist (#) Nov 19th, 2012 - 11:56 pm Report abuse
When it comes to being lectured by a paymaster, better Dilma (nice picture btw!) and Correa than Merkel, at least the former talk economic sense!

#5 Exactly

#8 Conos?
28 Ayayay (#) Nov 20th, 2012 - 12:27 am Report abuse
I also love this pic of Dilma.
Germany grew .5% in q1 of 2012, Brazil, .2%.

Lol, MERKEL was the FIRST to pull her country up in 2008-impressing the world!! She used strategies similar to those used in the Long Depression: protecting worker's jobs and upgrading her country's infrastructure.

NOTICE Dilma isn't being asked to subsidize/ guarantee Argentina!!

GROWTH RECAP:
Brazil: .2%
Germany: .5%
29 Elena (#) Nov 20th, 2012 - 01:37 am Report abuse
I dont share the thought of “only those ppl can give advice or not” When you have a problem is nice to have different kinds of imput, especially from those who had the same or similar problem you have and solved it with different means than the ones you are using actually.

I may be wrong but I have yet to see Spain looking to reestructure its financial system to see how much its actual system worked or didn´t work or even helped the crisis. If you implement austerity meansures without considering changing the estructural problems of the economy , then even if austerity works, is very possible another crisis will appear again with other sectors of the economy because you are working with the same economic institutional tools as before.

Now, lest not forget Spain,Portugal and Greece are part of a financial community now, in this context you can´t solve one crisis focusing just from one country to another, it may be necesary to see them as different economic areas that work within the framework of the EU. just my two cents.
30 Condorito (#) Nov 20th, 2012 - 12:56 pm Report abuse
@27
That’s right BK, Merkel has got it all wrong and made a complete mess of handling the German economy. Perhaps Spain should try to emulate Brazil’s success by reorienting their economy to exporting commodities (oh dear)....maybe not. Yes Ecuador (economic powerhouse) would be a better model to follow: GDP / head $7k and no national currency of their own.
“Coños” not “Conos”

@28
Quite right.
31 Conqueror (#) Nov 20th, 2012 - 04:20 pm Report abuse
@28 On the bright side, for Q3 2012

Brazil - +0.4%
Germany - +0.2%
UK - +1%
Argentina - -0.8%

That's a MINUS figure for argieland.

Ho hum! UK leads the way!
32 Nostrolldamus The 2nd (#) Nov 20th, 2012 - 06:06 pm Report abuse
UK leads the way with a enthralling, vertigo inducing 1% growth. We are all so impressed.

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA.

After 5 years of recession, that's the most you can pull off.

When Argentina pulled out of recession in 2002, 2nd half GDP went up 13%.
33 Conqueror (#) Nov 20th, 2012 - 06:46 pm Report abuse
@32 Afraid not. Is that what INDEC told you? Historic research shows that argieland's growth rate in 2002 was MINUS 4.9% from January to April, PLUS 0.5% from April to July and ZERO for the rest of the year. 2003 was a bit better. PLUS 3.7%, PLUS 3.2% and then down to PLUS 2.4%. Argieland didn't achieve more than 3% again until 2010. It didn't last. You see, we don't have to rely on what the argie government lies. Perhaps you're thinking of June/July 2003 when argieland got inflation down to between 14.3 and 10.2%?
34 ChrisR (#) Nov 20th, 2012 - 06:57 pm Report abuse
32 Nostrolldamus The
“When Argentina pulled out of recession in 2002, 2nd half GDP went up 13%”

I am right in thinking this was the year they robbed everybody stupid enough to give them money?

Yes, I thought so.

Lovely try though.
35 Ayayay (#) Nov 20th, 2012 - 08:15 pm Report abuse
@32 Ok, I'm offering mind expansion by math!

If you are reduced to ruins, getting a 100 pesos a month (when you used to get 10.000) and get a 13 Peso augmento:
13% growth!

(If inflation is zero. Inflation eats that sh*t).

If you had kept w that 10.000 pesos a month and then got a -300-- pesos raise, that's 3% growth.

If you go from owning a whole ENTIRE peso and you see another on the SUBTE tracks, that's 100% gro..
wha...
“ Timerman! How did you know we're here??”
“Oí monedas golpeando.”

Growth is understood in context.
For investors, growth perks their ears because they make money on INTEREST. Their money makes a big sucking sound when they leave.

For wage earners, you want the 10,000 peso career with the 300 peso raise.
36 Nostrolldamus The 2nd (#) Nov 20th, 2012 - 11:23 pm Report abuse
@33

Hahahahaha. Yeah sure 3% a year growth when in 2002 the country made 175k cars and last year 900k.

That industry alone would account for more growth than that. And then you forget the soy/commodity prices, tourism doubling fom 2.5 to 5 million, and internal consumption rising.

Nice try... actually bad try. Your numbers are shiite. hahaha

@35

What?
37 Ayayay (#) Nov 21st, 2012 - 01:33 am Report abuse
Oh.
Translation:
13% growth from the sh*tty, sh*tty hole Argentina put itself in in 2002 is easy.
I think you'll be seeing 13% growth again in your lifetime, for the same reason.
38 Nostrolldamus The 2nd (#) Nov 21st, 2012 - 02:01 am Report abuse
@37

UK put itself in the same shitty hole (-2% for a developed country with low growth rates and stagnant population growth is DISASTROUS), and still all you manage is 1% after 5 years of... nothing.

Get outta here. And please don't come back with your “my region” this and that. Your region must be so great you don't even acknowledge where you are from. Which means your “region/country” is a joke.
39 Ayayay (#) Nov 21st, 2012 - 03:39 am Report abuse
@38 I've said where I'm from a million times. Paradise.
40 Nostrolldamus The 2nd (#) Nov 21st, 2012 - 03:51 pm Report abuse
@39

Let's add liar to your list of traits. Your country is a hellhole, even if you say Norway. I already have researched any of your possible responses.

No one in their right minds go to live wherever you are from.

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