Néstor Kirchner, the Argentine president, wound up a four-day visit to Spain on Friday during which he shed the fiery anti-imperialist rhetoric of two years ago to win guarded support from the country’s business leaders.
Although it was flagged as a state visit, Mr Kirchner, accompanied by five ministers, dedicated much of his time to trying to win back the confidence of Spain’s multinational groups, some of which have outstanding lawsuits against his government for breach of contract.
Service and resource companies such as Teléfonica, Repsol, Endesa and Gas Natural were hit hard by Argentina’s financial meltdown in 2001, when the government was forced to dismantle an unsustainable dollar peg and default on more than $100bn (€79bn, £54bn) in bonds and bank debt.
Regulated electricity, gas and telephone tariffs were cut by more than 60 per cent as the country devalued, while successive caretaker governments froze utility rates to stifle popular unrest and keep a lid on inflation.
Spanish companies took heavy write-downs on the value of their Argentine businesses, while sustaining operating losses.
The election of Mr Kirchner in 2003 offered Spanish investors hope of political stability and a chance to renegotiate utility prices and concession contracts. These were quickly dashed, when the president used his first visit to Spain to lash out at “abuses” by Spanish multinationals, which invested more than $40bn in privatised utilities and infrastructure in the country during the 1990s.
Mr Kirchner’s tone this time has been more conciliatory, in part because he is seeking concessions from the Spanish government on the repayment of $840m lent by Madrid as the 2001 crisis unfolded.
According to officials, the decision by some Spanish companies to drop or suspend investment dispute claims had also played a role.
“You could say we’ve taken a break from hostilities,” said an executive.
Telefónica, the telecoms group, in February suspended claims worth $2.8bn, while Gas Natural agreed to withdraw claims after securing an agreement that tariffs would be raised.
Aguas de Barcelona, the Spanish water company, left the country last year after failing to renegotiate the terms of a water supply and treatment concession it held, with Suez of France, in the province of Buenos Aires. Like many Spanish utilities and infrastructure groups, it has swung the spotlight away from Latin America and on to Europe and the US in the search for growth and risk reduction.
Mr Kirchner’s appeal to business leaders for patience appeared to yield some fruit. Repsol, the Spanish oil group that bought YPF from the Argentine state in 1999, announced it would accelerate a $6bn investment plan in the country. Most of the money is earmarked for new exploration and the use of advanced technology to exploit mature oil and gas fields.
Contractual and technical problems in Argentina and neighbouring Bolivia forced the company to revise down proven reserves by 25 per cent this year.
Abertis, Spain’s leading toll road operator, signed a broad agreement on possible investment in return for assurances on toll increases.
Grupo Marsans, which owns 98 per cent of Aerolíneas Argentinas, agreed to sell between 5 and 20 per cent of the national flag-carrier back to the state.