Brussels, 16/01/2002 (Agence Europe) - On Tuesday, the European Commission examined an "information note" from Commissioners Chris Patten, Pascal Lamy and Pedro Solbes on the strategy adopted by the new Argentinean government to face up to the economic, social and political crisis affecting the country. They expressed the "serious doubts" they have about the effectiveness of the new package of emergency economic measures announced by Argentinean President Eduardo Duhalde, and consider there are certain elements lacking that are of prime importance for guaranteeing credibility and "reducing inflationary risks": - concrete budgetary measures; - reform of the central bank and a plan for compensating for losses suffered by banks because of devaluation of the peso. The Argentinean government is called upon to clarify its position on the subject of re-staggering its debt and lifting the partial freeze on bank deposits (the last point is still, for some authorities, the most serious political and economic challenge, says the Commission). Furthermore, the Commissioners express concern about the "heterodox elements in the package (dual exchange rates, violations of privatisation contracts, export taxes and possible price controls, etc) about the interventionist and protectionist tendencies within the government and about the possible unfair treatment of foreign companies and investors.
The new rescue plan would nonetheless be a "more serious attempt at tackling Argentina's economic problems than the populist package announced by his predecessor, Rodriguez Saá", write the Commissioners, who concede that: "the new package represents a step in the right direction".
Furthermore, the Commission considers that the Argentinean crisis should not have a widespread effect on the European economy in general, but only on some sectors and in some regions (notably Spain and its banking and energy sectors). Some Spanish companies "are being hurt not only by the fall in demand due to the Argentinean recession (Ed.: of 30% of the peso) but also, in some cases, by the devaluation, the government's decision to redefine tariffs in peso terms and the possible imposition of export taxes", the information note states. According to figures provided by the Commission, EU imports from Argentina represented a value of EUR 5.4 billion in 2000, that is, 0.5% of the total of European imports, while EU exports in Argentina accounted for EUR 6.1 billion (0.6% of all EU exports). The EU is Argentina's second largest trade partner, for both imports and exports. Spanish companies are by far the main foreign investors in Argentina (Repsol, Endesa, Telefonica and the banks BBVA and SCH, which control 20% of the Argentinean banking system).