WORLD VIEW/Michael McCaughan: The mood of the Spanish hosts at the EU summit of Latin America and the Caribbean (EU-LAC), last weekend in Madrid, was akin to a headmaster scolding recalcitrant pupils at the end of a disappointing academic year.
The Spanish Prime Minister, Mr Jose Maria Aznar, told President Eduardo Duhalde of Argentina, currently bottom of the class, to take "painful decisions" and secure a deal with the International Monetary Fund. The EU Commissioner for Economic Affairs, Mr Pedro Solbes, warned pupils that the strengthening of bilateral trade ties depended on prompt debt repayments and fiscal discipline.
There was a minor rebellion in the classroom as hard-working pupils resented the criticism; "Argentina did not come to the summit to beg for alms from Europe but to sell its products on the free market," said its Foreign Minister Mr Carlos Ruckauf.
Brazilian President Fernando Henrique Cardoso, a disciplined pupil, said that "one cannot replace the fight against poverty and social exclusion with an obsessive concern for security issues", touching on deep fault lines that separate EU and LAC priorities.
Latin America is in severe crisis with Argentina, Paraguay and Ecuador ruled by unelected, interim leaders. Venezuelan President Hugo Chavez narrowly reversed a military coup last month, while Peruvian President Alejandro Toledo arrived late to the summit due to escalating anti-poverty protests at home. Mr Aznar's initial, upbeat comments about Mr Chavez's ouster confirmed suspicions that the illegal overthrow of a government which defies free market orthodoxy will not be mourned in Europe.
The first EU-LAC summit, held in Rio, Brazil, in 1999, concluded with member-states signing a 55-point plan pledging to promote democracy and trade and tackle social equality. The Rio Summit paved the way for the signing of the Mexico-EU trade pact in 2000.
The EU has fostered trade links through regional blocs, becoming the first partner of Mercosur, South America's common market linking Argentina, Brazil, Uruguay and Paraguay. The EU-LAC relationship looks set to grow in the coming decade, as EU members, including Ireland, rapidly expand trade links with the region.
Mr Aznar successfully steered the summit towards "drugs and thugs", demanding collective action against drug-trafficking and terrorism in line with EU foreign policy goals.
"Our relationship with Europe has unlimited potential," said Mexican President Vicente Fox, "the issue is whether we have the capacity to take advantage of this". Mr Fox's comments reflected the collective goal of strengthening trade links and reducing dependence on the US.
The Madrid Commitment, signed by 38 European, Latin American and Caribbean leaders, welcomed the establishment of an International Criminal Court and rejected unilateral trade measures. Those words must be matched by actions, as EU tariffs on agricultural goods have promoted drug-trafficking and terrorism in Andean nations; "The 54,000 illegal acres of coca crops that exist in Peru could be cultivated with coffee and cotton if these products could be sold in Europe without tariff barriers," said Peruvian President Alejandro Toledo.
Latin Americans have watched with incredulity as European and US governments direct huge subsidies and erect tariff walls around key industries, while prescribing unfettered free trade as an article of faith abroad. Spanish banks invested €90 billion in Argentina since 1997, enjoying generous profit margins due to runaway fee hikes. When the squeeze came this year the Argentinian state froze small accounts but the giant banks, with prior notice, sneaked billions of euros out of the country in illegal capital flight.
Anyone who has spent time in Latin America will be aware that economic and political difficulties arise not from laziness or lack of initiative but from corruption, mismanagement and the unequal relationship imposed by industrial heavyweights on weak economies lacking welfare provisions.
The IMF approves loans but demands the rolling back of hard-won labour rights then retreats behind the riot shields, leaving local politicians to take the flak. Citizens have lost all respect for politicians and, more dangerously, for democracy itself. "It doesn't put food on our table," a Paraguayan worker told me, recalling dictator Alfredo Stroessner (1954-89) with something approaching nostalgia.
Mr Chavez blamed the current crisis on "an overdose of neo-liberal poison" and announced the antidote; a joint EU-LAC Marshall plan which would cancel debt and inject funds into housing, health and education. The summit leaders shuffled papers and pretended not to have heard such an outrageous suggestion.
EU investment funds have targeted the privatisation of state assets, transforming energy and communication networks into foreign-owned monopolies. The cost of such services has skyrocketed as multinationals stake out huge profit margins, while consumers suffer job losses and inflation.
The Madrid Commitment expressed support for the Argentinian government and "extreme concern" about Colombia's deepening civil war. The summit document "rejected the repeated violations of human rights and international humanitarian law by illegal groups in Colombia", but said nothing of crimes against humanity committed by state security forces, as detailed by Amnesty International.
The planned inclusion of Colombia's FARC rebels in the EU's list of terrorist groups coincides with the likely election of right-wing candidate Alvaro Uribe, who remains well ahead of his rivals in tomorrow's presidential elections. Any hope that EU policy might act as a counter-balance to US hegemony has been steadily eroded by Mr Aznar and Mr Tony Blair, whose priorities dovetail seamlessly with strategic US goals.
Mr Aznar has set the tone for Europe's strategic partnership with Latin America and the Caribbean: a rosy future for investors who will enjoy protection from bankruptcy while the ordinary citizen stands alone amidst the hurricane. The market economy, which promised stability and prosperity, has not led to improved living standards.
An alternative summit was organised in Madrid by critics of free trade, highlighting persistent state terror and the threat posed by corporate investment to traditional lifestyles. The conference was organised by hundreds of groups engaged in autonomous development work in Latin America, notably farming, housing and health projects. Some 150,000 people marched peacefully through Madrid in demand of a new world, numbers that reflect the growing popularity of the alternative globalisation movement.
The strategic relationship that really counts lies in a potential partnership of equals between those inside and outside the summit.