* Europeans' plight gives purpose to summit
* Spain seeks investment from Latin America
* Latin Americans want to encourage small, medium firms
By Angus MacSwan
CADIZ, Spain, Nov 16 Spain and Portugal sought
help on Friday from their former Latin American colonies to
rescue them from economic crisis through a new wave of trade and
investment across the Atlantic Ocean.
Suffering deep recession and with their citizens protesting
at job losses and austerity measures, the two European countries
hope the Ibero-American Summit of leaders in the historic port
of Cadiz can open up desperately needed business opportunities.
But in an incident that testified to Spain's woes, police
fired tear gas and rubber bullets at a group of more than 200
shipyard workers who rallied outside the Cadiz docks to protest
against reductions in work. The demonstrators had thrown rocks
at the police, a Reuters witness said.
In contrast to Iberia's downturn, figures released by the
Organisation for Economic Cooperation and Development forecast
growth in Latin America of 3.2 percent in 2012 and 4 percent in
"More Latin America in Europe and Spain is a recipe to
confront the present challenges," Spanish Prime Minister Mariano
Rajoy said in his opening speech at the gathering.
The plight of the former imperial powers has lent purpose to
a summit that in recent years had come to resemble a redundant,
ceremony-laden event dominated by the antics of populist leaders
such as Venezuelan President Hugo Chavez.
Chavez is not attending the meeting in Cadiz, which
prospered in the centuries of Spanish rule in the Americas.
Although Spain's King Juan Carlos is the host, the most
important figure at the summit is Dilma Rousseff, president of
economic powerhouse Brazil.
Spain has made clear it regards Portuguese-speaking Brazil
as vital to its salvation.
It is already the second-biggest foreign investor in Brazil
and Rajoy wants Spanish companies to get a slice of
infrastructure projects, such as ports, highway and airports,
including those for the 2014 World Cup and 2016 Olympics in
Brazil. Rousseff will stay on in Spain for bilateral talks.
Major Spanish firms such as Telefonica and banking
giant Santander now rely on their Latin American
operations, and Brazil in particular, for a hefty chunk of their
profits as local markets decline.
On Friday, Spanish technology company Indra said a
quarter of its revenue this year will come from Latin America,
where its sales have increased 12-fold over the last six years.
Brazil is its second biggest market after Spain.
Ibero-American Secretary-General Enrique Iglesias said in
his opening speech the summit offered "hope and solidarity".
"Spain and Portugal have in the Ibero-American relationship
an essential point for stimulating growth," he said.
"International cooperation can speed up recovery and reduce the
social cost, above all unemployment."
Iglesias called for more credit to finance investment in
infrastructure projects and to expand exports.
But he warned Latin America could not remain immune to the
problems roiling other world markets if low growth continued. He
also urged the continent to embrace free trade and to diversify
its economies to further reduce poverty and inequality.
The summit is also focusing on finding ways to get small-
and medium-sized companies from Spain and Portugal i nto Latin
America and its market of nearly 600 million people.
Alicia Barcena, executive secretary for the Economic
Commission for Latin America and the Caribbean (ECLAC), urged
Spanish banks to finance such businesses.
"Spain has to help us here," she told a business forum.
Spanish banks, crippled by the collapse in 2008 of a 10-year
building boom, have slashed lending to focus on recapitalising
to compensate for hundreds of billions of euros in bad loans.
Flemming Barton, analyst at CM Capital Markets in Madrid,
warned against anyone getting their hopes up too high.
He told Reuters that certain big Spanish infrastructure
firms could largely forget about winning lucrative concessions
in the short to medium term because of their debt and funding
"As a government you don't want to sell concessions,
especially those viewed as strategic - i.e. roads, airports - or
providing key services to companies which are perceived to be
weak, overstretched or at risk, as you might find yourself
having to intervene, even sell them off again, in a worst case
situation," he said.
Portugal is also keen to attract Brazilian investment for
the privatisations it has been forced to carry out under the
terms of its euro zone bailout.
But it turned to China for the sale of a stake in utility
Energias de Portugal (EDP) last year, rejecting Brazil's
Eletrobras despite heavy lobbying.
In the privatisation of airport operator ANA, Colombian
construction company Odinsa is involved in a bidding consortium,
as is an Argentine and Brazilian firm. Colombian-Brazilian
tycoon German Efromovich is vying to buy Portuguese airline TAP.
Big Portuguese companies still have large stakes in Brazil,
including EDP and Portugal Telecom, which have helped support
them after earnings slumped at home due to the recession.
While the summit made much of solidarity in troubled times,
there are cracks in some relationships, especially those
involving left-leaning governments.
Spain and Argentina are still in dispute over Argentina's
nationalisation of Spanish oil major Repsol's YPF unit
in April. Argentine President Cristina Fernandez cried off the
summit on health grounds.
"YPF underlines potential risks, especially when investing
in strategic industries," Barton said.