Spanish Prime Minister Mariano Rajoy meets with Latin American leaders today in Panama, where Madrid-based companies are helping expand the canal and build the nation’s first subway as construction slumps at home.
Facing declining domestic demand and a European debt crisis, Spanish companies have sought investment and trade from former colonies as the region outpaces Spain in economic growth. This week’s Ibero-American summit comes as Spain’s economy shows signs that it has stabilized amid a U.S. political stalemate that almost pushed the world’s largest economy into default.
“Latin America cannot forget Europe,” Spanish Prince Felipe de Borbon y Grecia, who accompanied Rajoy, said at an opening ceremony yesterday in Panama City. “We have a long way to go, but the Spanish economy is finding its way.”
Rajoy and Mexican President Enrique Pena Nieto are among 13 heads of state that will attend talks over the next two days in Panama City. Venezuela, Brazil and Argentina are not sending their presidents, according to meeting organizers.
In his opening remarks yesterday, Panama President Ricardo Martinelli said the summit will give businesses leaders and government officials a chance to boost foreign investment in Latin America’s fastest-growing economy for the past two years. Panama’s economy expanded 7.6 percent in the second quarter from a year earlier.
Rajoy needs exports and tourism to rekindle growth as tax increases, spending cuts and an unemployment rate of more than 26 percent undermine domestic spending. Madrid-based Sacyr SA is helping build a third set of locks as part of the $5.25 billion expansion of the Panama Canal, while another Spanish builder, Fomento de Construcciones y Contratas SA, is nearing completion of a subway system in Panama City, Central America’s first.
Spain expects European Union members to agree next month that its banks don’t need further state aid as the euro region’s fourth-largest economy starts to recover from a six-year slump. Its 12-month borrowing costs fell this week to the lowest since April 2010, when Greece requested its first bailout from the EU.
Spain’s economy will expand 0.6 percent next year, according to the median estimate of 43 analysts surveyed by Bloomberg.