•  buenos aires
• Monday, April 23, 2012
• Inter Press Service

Hundreds of Spanish companies continue to do business in Argentina, despite Madrid’s campaign in defence of Repsol, which controls YPF — the oil company that the government of Cristina Fernández plans to renationalise.

Fernández sent Congress a bill on Monday Apr. 16 to seize 89 percent of Repsol’s shares in YPF, Argentina’s largest oil company, which would give the Argentine state a 51 percent stake. In response, the centre-right government of Spanish Prime Minister Mariano Rajoy launched a diplomatic offensive in search of international allies against the move.

The chief interest of Spain, the fifth biggest importer of Argentine products in 2011, is biofuels, of which it imports 800 million dollars worth a year, representing 68 percent of total imports from this country, according to the Abeceb consultancy. But on Friday, the Spanish government decided to limit its imports of biofuels from Argentina, by applying a measure approved in October 2010 that favours companies located in Europe.

However, the tension between the two governments contrasts with the business-as-usual attitude among Spanish companies of all sizes that operate in Argentina, and among investors as well, as capital continues to flow in, according to the Spanish chamber of commerce in Argentina (CECRA).

There are 205 Spanish companies active in key sectors of the Argentine economy, like energy, telecommunications, public services, banks, insurance, real estate, the fishing industry, the food industry, publishing, construction, infrastructure, the automobile industry, software, tourism, and retail chains.

Figures from the Spanish Embassy in Argentina indicate that 28 percent of foreign investment in this South American country in 2009 was from Spain. The Argentine branch of the Spanish telecoms company Telefónica reported earnings of 4.16 billion dollars in 2011, which represented five percent of the global business of the transnational corporation, 63 percent of whose clients are in Latin America.

Another big Spanish company with a large presence in Argentina is the power utility Endesa: 4.7 percent of its assets in Latin America are in Argentina. The Santander and BBVA banks are also active here. 'One way or another, this will affect the Spanish economy,' Juan Benítez, a professor of applied economics in the southern Spanish city of Málaga, told IPS.

A decline in the performance of a company like Repsol affects not only the shareholders, but also the company’s workers, suppliers and firms with which it has trade ties, he said. Repsol had just over 36,300 employees in 2010, distributed among more than 30 countries. But 46 percent were in Spain and 37 percent in Argentina.

Less than a month ago, CECRA received a delegation of representatives of 22 small and medium businesses who came from Madrid in search of opportunities that could be provided by becoming suppliers to large Spanish companies that are already established here. The president of CECRA, Guillermo Ambrogi, told the press in February that Argentina 'will continue to be the third biggest recipient in Latin America of foreign direct investment from Spain, after Mexico and Brazil.'

CECRA, which works with the ministries of foreign relations and industry of Spain, has 830 members in Argentina, which are Spanish companies or joint ventures of different sizes. Ambrogi, who also represents the federation of Spain’s chambers of commerce in this region, reported that Spanish investment in Argentina has totalled 60 billion dollars over the past 17 years.

Taking a cautious stance in the wake of the announcement of Argentina’s seizure of a majority stake in YPF, CECRA refused to talk to journalists, and only held meetings with the Spanish Embassy, to reach a consensus before taking a stance. Although this silence may indicate concern among Spanish businesses, activity has continued as usual.

© Inter Press Service (2012) — All Rights Reserved. Original source: Inter Press Service

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