EU demands 'legal certainty' of Latin investments

Published on NewsOK Modified: January 27, 2013 at 3:45 pm •  Published: January 27, 2013
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Europe has been desperately seeking new profits in a region it colonized with gunpowder and horses 500 years ago. It gained new dominion in the 1990s as dictatorships gave way to weakened democracies. But the latest data show how much times have changed.

While Latin America's commodity-rich economies have weathered the global crisis, growing by 3.1 percent last year, Europe contracted by 0.5 percent. This year's growth forecasts suggest little immediate relief for an Old World stuck in recession.

Bolivian President Evo Morales rejected the Europeans' calls for profit-guarantees for their companies, saying Europe plundered Latin America for way too long to make such demands now.

Access to water, electricity and other basic services are rights of the people, not corporations, he said. The first indigenous president of the poor-landlocked country nationalized several Spanish electricity distribution companies last year.

Venezuelan President Hugo Chavez has nationalized a long list of foreign companies, sometimes triggering compensation disputes. Argentina has refused to pay Grupo Repsol $10.5 billion for expropriating the Spanish company's stake in the YPF oil company

Europe came to the summit hoping to get the Latin leaders' signatures on a declaration promising to stop these takeovers and other protectionist measures that have scared investors away, from currency controls and new taxes to constantly changing import and export rules.

But Venezuela refused to sign, prompting the Europeans to drop a phrase committing the leaders to ensure their regulations adhere to "international commitments and obligations."

Van Rompuy, a former prime minister of Belgium, said the summit provided much reason for optimism. But he insisted that "a stable, transparent and predictable legal framework" is essential.

"We need more trade, more free trade," he said. "We have to avoid protectionism."

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Associated Press writers Federico Quilodran, Eva Vergara and Michael Warren in Santiago, Chile contributed to this report. —

Luis Andres Henao is on Twitter: https://twitter.com/LuisAndresHenao

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