MercoPress. South Atlantic News Agency

Argentina and Venezuela agree “strategic alliance”

Argentina and Venezuela announced in Caracas a “strategic alliance” to beef up the “Caracas-Buenos Aires axis”.

President Nestor Kirchner and Hugo Chavez made the announcement following a bilateral meeting in the framework of the Mercosur presidential meeting in Caracas to sign Venezuela's adhesion protocol to the South American customs union.

"A strategic committee will be tasked with following up on the workings of the Caracas-Buenos Aires axis" said President Chavez following the signature of several bilateral economic and cooperation agreements.

Among the initiatives agreed is the floating of a "South bond" which should help start an investment bank for the south and finance infrastructure development in both countries.

"We've begun to work with the idea of a South bond, which in two/three months should help us organize a structure to generate sufficient funds to consolidate strategic investment processes", said Kirchner.

Venezuela and Argentina have close financial ties going back to Argentina's restructuring of its massive default. President Chavez helped by becoming a regular holder of Argentine sovereign bonds having acquired 3.2 billion US dollars in 2005 and 1.45 billion so far this year.

Other initiatives include the construction of houses, hydrocarbons exploration and exploitation in Argentina, assessment and quantification of tar sands in the Orinoco basin and industrialization of natural gas.

President Chavez publicly thanked Kirchner's for Argentina's support in Venezuela's incorporation to Mercosur, which he described as "decisive".

"Venezuela's incorporation to Mercosur can be attributed, among other factors, to the firm, sustained support of President Kirchner", said Chavez.

Venezuela's membership "will help us reinforce the dialogue with the European Union bloc, Asia and the rest of the world" highlighted Kirchner.

But in spite of the strong bilateral understanding and cooperation, President Chavez revealed that "some of the joint projects are doing fine, others not so much and others haven't taken off", and specifically mentioned the delays in the launching of oil tankers under construction in Argentine shipyards.

However "the first tanker to be built in Argentina for the Venezuelan oil corporation will be named after Eva Peron" announced Chavez.