Argentine President Eduardo Duhalde is in Spain to garner international aid needed to save his country from further economic ruin. But trouble‘s still ahead, depsite reforms approved to unlock frozen cash.
Leaders from the EU and Latin America met in Madrid for a two-day summit
European Union and Latin American leaders meeting in Spain have called for closer, stronger ties between the two markets. It’s a call that Argentina is depending on. In a year that has seen Latin America’s third largest economy default on debt and devalue its currency, the Argentine crisis is showing no signs of letting up.
Earlier in the week, the parliament in Buenos Aires approved reforms required by the International Monetary Fund, such as changing a contested bankruptcy law - a major step towards unlocking frozen international aid. The law had favoured debtors over creditors.
But Argentine President Eduardo Duhalde still has his work cut out. Before IMF cash starts to flow, before there is any relief in the economic crisis, he’ll have to scrap a law covering economic crimes and persuade powerful local governments to cut back on spending.
Madrid summit vital for Argentine recovery
Duhalde’s trip to Spain is vital for his country’s economic rehabilitation. In a television interview, Duhalde said that a priority at the two-day conference would be to shake off Argentina’s reputation as a 'black sheep‘ in the global economy.
Eduardo Duhalde, Argentine President
In Madrid on Friday, the Argentine leader (photo) got – at least in part - what he’d been after. Spain, who holds the European Union‘s rotating presidency, has urged the EU to send a strong message of support to Latin America. And with it Argentina.
The Spanish Prime Minister, Jose Maria Aznar, said in an interview for Spain’s EU presidency website:
"Latin America needs to stay connected to the globalised world by opening up commercially, and at the same time maintaining legal and economic frameworks which encourage investment," said Aznar.
Just prior to the summit, Spain’s Banco Santander Central Hispano bank, which runs Banco Rio in Argentina, assured Duhalde that it would be staying in the country. Banco Rio has suffered losses because of the financial crisis.
Duhalde responded with confidence: "They know Argentina has potential and they are willing to support the country."
Also at the summit, the Mercosur trade bloc, which Argentina belongs to - along with Brazil, Paraguay and Uruguay - is seeking to negotiate a so-called association agreement with the EU. If successful, it would mean a free trade area and closer political ties.
Money’s not everything
Spain pushed hard on Friday for the EU to designate Colombian rebels as terrorists. The FARC, or Revolutionary Armed Forces of Colombia, have engaged in sporadic conflict with the regular army over decades deploying both terrorist and military means.
Recently, the leftist rebels have been in on-and-off talks with Colombian President Andres Pastrana, who has also asked the group to be blacklisted. According to the Spanish Foreign Minister, Josep Pique, that could happen within the next few days.
The EU can freeze the assets of organisations on its terrorist list. Spain’s armed separatists, ETA, who are fighting for independence from Madrid in the Basque region, is already on the list.
In the run-up to the summit, human rights watchdog Amnesty International had called on 48 European and Latin American countries to focus on human rights issues. EU External Affairs Commissioner Chris Patten pointed the finger at Cuba, saying that an improved human rights record there would set the tone for improving Cuban relations with Europe.
The EU-Latin American summit ends on Saturday.