May 12, 2006

Leftist S.American duo hail end of “neoliberalism”

By William Schomberg and Boris Groendahl

VIENNA (Reuters) - The leftist presidents of Venezuela and
Bolivia confronted European and Latin American leaders with
their brand of socialism on Friday, claiming a new era had
dawned on their continent.

Hugo Chavez, who once led a failed coup attempt before
winning power via the ballot box, condemned the pro-market
policies which many Latin American states have adopted in the
last 20 years but are increasingly out of favor with voters.

"Neoliberalism has begun its decline and has come to an
end," Chavez told reporters after posing for a photograph with
nearly 60 other heads of state from the European Union, Latin
America and the Caribbean at a summit in Vienna.

"Now a new era has begun in Latin America. Some call it
populism, trying to disfigure our beauty. But it is the ...
voice of the people that is being heard," he said.

Mexican President Vicente Fox earlier said the region had
failed to overcome its historic problems, including "populism"
and inconsistency of policies.

Bolivia and Venezuela have increasingly riled governments
on both sides of the Atlantic.

Bolivia's new President Evo Morales, an ally of Chavez,
nationalized its oil and gas sector on May 1 and has promised
further tough action with foreign investors.

And Venezuela has upset plans for EU-Andean trade talks by
saying it will quit the South American group in protest at
trade deals by neighboring countries with the United States,
whose influence Chavez is trying to challenge.

British Prime Minister Tony Blair urged the two countries
not to act irresponsibly.

"What countries do in their energy policy when they are
energy producers like Bolivia and Venezuela matters enormously
to all of us," he told reporters. "My only plea is that people
exercise the power they have got in this regard responsibly for
the whole of the international community."

European Commission President Jose Manuel Barroso declined
to comment on specific nations but told reporters populism was
a threat. "We are a Europe against populist tendencies," he

United Nations Secretary General Kofi Annan said investors
needed guarantees of long-term stability. "Without that
assurance you may be disrupting all economic activities," he
told reporters.

The summit was planned as a chance to take ties between the
EU and several regions of Latin America to a new level.

But with several Latin American governments embroiled in
disputes, only a deal for the launch of trade, investment and
aid talks between the EU and Central American countries is


Morales, a former coca farmer making his first presidential
trip to Europe, has relished the chance to challenge former
colonial powers and Bolivia's present heavyweight neighbor
Brazil for "pillaging" his country.

EU diplomats say they do not want a row with Bolivia but
are worried about the country's new direction.

"We don't have a paternalistic relationship with Bolivia.
What we want is to encourage Bolivia not to do things that in
the end will hurt Bolivians themselves," a top EU official

Brazil reacted angrily to comments by Morales that
state-controlled oil company Petrobras had acted illegally in

"We are perplexed by what (he said). If you want to
interpret 'profoundly perplexed' with a term like
'indignation,' that would not be far from the truth," Brazilian
Foreign Minister Celso Amorim told reporters in Vienna late on

On Friday, Morales is expected to meet Spanish Prime
Minister Jose Luis Rodriguez Zapatero and Brazilian President
Luiz Inacio Lula da Silva, also a former union leader but who
has stuck to more orthodox economic policies than Morales.

As well as Brazil's Petrobras, Spain's Repsol is a major
investor in Bolivia's energy sector.

(Additional reporting by Jason Webb and Guido Nejamkis)