An unusual business meeting that the Argentine president, Javier Milei, has proposed to a group of renowned Spanish executives: this Saturday, at 9:30 a.m. and with minimal details about the format and content. The ultraliberal’s call to companies with interests in the South American country tries to bring together leaders around an economic program, known as the chainsaw, and which has already been applauded by the International Monetary Fund (IMF). “Let’s make Argentina the new Rome of the 21st century,” Milei exclaimed last week in Los Angeles (California, USA), during the Global Conference organized by the Milken Institute. He was in the prelude to his three-day trip to Spain, which began this Friday and in which he will not have contact with representatives of Pedro Sánchez’s Government.
Milei will once again talk about his country as “a land of opportunities”, it is clear. But the bitter taste left by the tension of weeks ago with the Spanish Executive, and the distance taken with the authorities of this country, mean that more than one businessman has doubted whether to go or send to second levels. For the economic meeting, scheduled at the Argentine Embassy in Madrid, the presidents and CEOs of groups such as Santander, BBVA, Telefónica, Iberia, Indra, Mapfre, Ecoener, Dia, the investment firm Consello Group or the CEOE itself, among other references. Along with the Argentine leader, the presence of the Secretary General of the Presidency, and little sister of the president, Karina Milei, and the Argentine ambassador to Spain, Roberto Bosch, is expected.
Confidentiality has been requested from the guests, at least before the appointment, but sources familiar with the details agree that the first problem is equalizing the level of representation of the companies. While Santander is considering sending its CEO, Héctor Grisi, or Iberia, everything indicates that it will be its president, Marco Sansavini, who responds to the appointment with Milei, some firms such as Mapfre are considering taking a seat with one of its vice presidents. Along these lines, the presence of Telefónica’s first executive, José María Álvarez Pallete, is ruled out. Other important Spanish entities with subsidiaries in Argentina are Abertis, Gestamp, Técnicas Reunidas, Codere, Meliá or Prosegur, of which it is unknown if they will place a representative in the photo with Javier Milei this Saturday.
The same sources hope that after the intervention of the Argentine president, in which the announcement of “enormous investment opportunities” is expected, as he has already highlighted in similar forums, there will be an exchange of impressions with the executives. A hundred companies have strong interests in the third largest Latin American economy (after Brazil and Mexico, and ahead of Chile) and are waiting for the political turn of the Casa Rosada – the seat of the Argentine Government – to allow normality to be recovered. in its local operations.
A problem shared by all large Spanish firms operating in Argentina is the impossibility of freely accessing the exchange market and sending dividends to their parent companies. “We are fixing the issue of dividends. When we finish doing that, we are going to open the stocks. It is in our plans to open it as quickly as possible,” Milei confirmed last Wednesday at an event with local businessmen.
The Argentine Central Bank, one of the politicians’ most reviled enemies, recently authorized banks and companies to buy a bond to allow normalization in this area. For example, the local subsidiary of Banco Santander, the main private entity by volume of deposits, received authorization on May 3 to distribute dividends of 247 million euros.
Financial firms of Spanish origin operating in Argentina have also begun to offer products that until recently were paralyzed by inflation, which reached 211.4% in 2023. Santander and BBVA have announced this last week the return of 20-year mortgage loans for their clients, which the Government hopes will boost the purchase and sale of properties.
Down with regulation
But beyond the financial sector, the new state deregulation policy may have effects on the businesses of Spanish companies. In April, the Argentine Government repealed a rule approved in 2020 that regulated mobile telephone services, as well as cable TV and internet access. Telefónica will operate in a free market environment, although it feels the encouragement of the Administration, in the face of the heavyweight of telecommunications in Latin America, the Mexican Carlos Slim. The State scrapping bill, which awaits consideration by the Argentine Senate before the end of the month, also includes changes in the aeronautical sector. The new “open skies” policy would allow companies like Iberia, which controlled Argentina’s flag carrier during the 1990s, to carry out domestic flights in a market without minimum prices.
To understand the depth of the Argentine market in large Spanish references, Santander, for example, has 8,360 employees spread across 318 offices there. The business in the Latin American country generated a profit of 386 million euros in 2023, which represents just 3.5% of the profits obtained by the group in total, although the accounts are conditioned by the hyperinflationary accounting applied by the bank in the country. BBVA, which also has a subsidiary in Argentina, did not want to comment on whether any of its executives will attend the meeting with Milei.
Mapfre, another of the Spanish listed companies that will send a representation to the reception of the Argentine Embassy, has had a presence in the southern country since 1986, when it acquired the company Aconcagua. Its Argentine subsidiaries serve 350,000 clients and have 190 offices and 480 employees, although its market share is low, 2.29% (occupying fifteenth position in the sector). The disastrous evolution of the Argentine economy in recent decades and the very strong devaluation of its currency have been a headache for the insurance group, although it has always maintained the commitment to remain in Argentina, just as it has done in Venezuela.
One of the few companies that seems to escape the dark clouds of the Argentine economy is Dia, which maintains a leadership position in the retail Argentinian. The supermarket group, which has operated in the South American country since 1996, has managed to gain market share in the local market, as highlighted in its results for the first quarter of the year, thanks to its commitment to its own brand and the proximity model. “Inflation and general uncertainty have caused consumers to increase the number of visits to stores,” says the company’s latest report.
Telefónica, Abertis, Repsol, Aguas de Barcelona, BBVA, Naturgy, Endesa… The list of Spanish companies that have had problems in Argentina in the last 20 years is endless. Executives from some of them will again hear this Saturday estimates about the speed at which the economy can recover, at what percentage inflation could be stabilized, arguments about the benefits of the austerity plan or all kinds of promises about the legal security it seeks. shield foreign investment.
After the meeting, President Milei will meet with Santiago Abascal, deputy and president of VOX, whom he will also accompany on Sunday at the far-right party’s annual convention.
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