As a booming Chile hosts leaders of an ailing Europe, Pinera says 'Welcome to a better world!'

"Welcome to a better world," President Sebastian Pinera told Mariano Rajoy of Spain as a 60-nation summit got under way on Friday, teasing his counterpart with barbs reflecting the changing fortunes of a Europe mired in crisis as Latin America booms.

The economies of Latin America have resisted the global downturn with solid domestic demand, growing by 3.1 percent last year compared to a 0.5 percent contraction in Europe, and are forecast to grow even faster this year as the Old World remains stuck in recession. Spain is particularly troubled, with a record 26 percent unemployment, putting nearly 6 million people out of work.

"You're in better shape than I imagined, in good health and in shape," Pinera told Rajoy, grinning widely.

"We do have a sense of humor, which is what you need to stay in this business," Spain's president responded.

Only a few years ago, European companies were using ample cash to buy up assets in a Latin America mired in debt and inflation. Now that the tables have turned, they're using their cultural and heritage ties to plead for Latin executives to invest on the other side of the Atlantic.

Spain needs help desperately. The country is in its second recession in three years following the collapse of its once-booming real estate sector. Rajoy's year-old conservative government has made financial reforms and applied severe austerity measures, cutting wages and raising taxes in hopes of a turnaround.

"We're going to maintain our current economic policy in Spain," Rajoy said during his joint appearance with Pinera at La Moneda, Chile's presidential palace.

European Commission Vice President Antonio Tajani brought along 49 executives from the EU's nine member countries, representing companies that ultimately employ 2 million people, the EU said. The commission's goal for the weekend is to help small and medium-sized European businesses gain more market share in rapidly-growing Latin America, where EU countries already make up 43 percent of the region's international trade.

Other top government leaders attending the European Union-Latin America-Caribbean summit include Germany's Angela Merkel, Brazil's Dilma Rousseff, Mexico's new president Enrique Pena Neto and Nicolas Maduro, who is making his first international appearance as Venezuela's acting president while Hugo Chavez is hospitalized with cancer in Cuba.

Cuban President Raul Castro also arrived Friday to take over the rotating presidency of the CELAC group of countries from Pinera. Castro's presence in Chile infuriated the hard-right party in Pinera's coalition, which accuses Castro of harboring criminals responsible for assassinating the Chilean party's political leader in 1991.

To mollify them, Pinera agreed to give Castro a folder containing "new evidence" in the case. The party's lobbying has already led to street clashes outside Cuba's embassy and some politicians say Cuba has no place in the alliance of democracies.

Protesters were also expected on the streets of Santiago Friday night for an alternative "people's summit" calling for everything from free education and environmental protections to an end to a controversial anti-terror law that Chile is using to quell violence in a southern region that the Mapuche, the country's largest indigenous group, considers its usurped ancestral land.


Associated Press writers Michael Warren and Federico Quilodran in Santiago, Chile contributed to this report.


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