Daily Reports
Diplomatic Crisis Erupts Between Argentina and Spain Over Milei’s Controversial Comments
The diplomatic landscape between Argentina and Spain has been severely strained following controversial remarks made by Argentine President Javier Milei. During a far-right summit hosted by Vox in Madrid, Milei criticized Spanish Prime Minister Pedro Sánchez and his wife, Begoña Gómez. His remarks have led to significant backlash, including condemnation from several Spanish companies operating in Argentina.
In a recent report by Spain's Foreign Trade, Exports, and Investments (ICEX), figures highlight the strong economic ties between the two nations. Spanish companies have invested a staggering 22,659 million euros in Argentina, with 167 million euros being invested in 2023 alone. Argentina, in turn, has contributed 75.4 million euros to Spain. Spain ranks as the second-largest investor in Argentina, following the United States.
The economic relationship has typically mirrored Argentina's economic conditions, with Spanish exports increasing during economic growth periods and declining during crises. Key sectors of Spanish investment include oil and natural gas extraction, financial services, manufacturing, telecommunications, and non-metallic mineral product manufacturing.
Prominent Spanish companies with significant operations in Argentina include Telefónica, Santander, BBVA, Iberia, Air Europa, Cabify, Dia, Naturgy, Planeta, Indra, Mapfre, Meliá, NH Hoteles, and Abertis. These companies had expressed interest in further investments just before the fallout from Milei’s remarks.
For instance, Santander has pledged an investment of US$ 225 million between 2022 and 2024 for software and hardware development, while Dia has planned a US$ 100 million investment for store remodeling and opening between 2021 and 2023. Iberia is also set to enhance its connectivity with a 50% increase in capacity between Madrid and Buenos Aires in the upcoming winter season.
However, Milei’s comments have led to a wave of rejections from Spanish companies. The President of the Spanish Confederation of Business Organizations (CEOE), Antonio Garamendi, criticized the remarks as undiplomatic and inappropriate, emphasizing that such statements do not belong in discourse between two friendly nations. Telefónica, Naturgy, and Abertis also aligned themselves with Garamendi’s stance, stressing the need for respectful and collaborative dialogue.
This diplomatic rift represents an unprecedented cold snap in the relations between the two countries, said observers, warning it could seriously impact bilateral and commercial ties. Milei had previously committed to improving the business climate and ensuring legal security for Spanish companies in Argentina. Hence, his recent controversial statements have created significant uncertainty regarding the immediate future of Spanish investments in the country.
- Spanish companies feel particularly betrayed as they had shown intent to increase their investments following a Saturday meeting with Milei. At this meeting, Milei had promised to improve the business climate.
- Companies including Iberia, Meliá, and Santander had outlined substantial investment plans set to be significantly beneficial to both economies. The rebuke from Spanish business executives underscores the critical impact diplomatic discourse can have on economic engagements.
