MONTEVIDEO (Reuters) - An expansion of the Greek crisis to the rest of Europe could stimulate investment in Latin America, such as a $2 billion to $3 billion Portuguese pulp plant being studied in Uruguay, the South American country’s vice president said on Wednesday.
Portucel PTI.LS is evaluating building a mill and port in southeastern Uruguay.
“Perhaps the repercussion of the European situation will be a stimulus for companies to go abroad. (Portucel) recently said it continued to be interested in investing in Uruguay, the biggest investment in our history,” Uruguayan Vice President Danilo Astori told the Reuters Latin American Investment Summit in Montevideo.
“In some cases, including in some big projects, it could be important to get out of Europe,” he said.
Astori said that Latin America would be protected somewhat from contagion from the Greece crisis because of high prices for raw materials, which are the bedrock of most economies in the region.
European leaders warned on Wednesday that a euro zone debt crisis could spread beyond Greece if the country did not get a rescue package, and reverberations from Europe roiled Latin American markets as risk aversion grew.
Dreams of a long-delayed free trade agreement between the European Union and the Mercosur trading block of Argentina, Brazil, Paraguay and Uruguay would be further set back by a generalized European slump, Astori said.
Astori, a moderate leftist, holds the reins of Uruguay’s economic policy under President Jose Mujica after being economy minister under Mujica’s predecessor Tabare Vazquez.
Mujica is a former guerrilla, but is considered one of Latin America’s moderate leaders. Uruguay is a beef exporting nation with one of the most stable economies in the region.
Reporting by Conrado Hornos, translating by Fiona Ortiz; Editing by Phil Berlowitz