Waterfall steals the show at jungle summit

There are summits and summits – and then there are summits in a remote corner of South America, where Brazil, Argentina and Paraguay meet in sub-tropical jungle and where, for the first time, a British Prime Minister set foot on the soil of a recent enemy.

Tony Blair's brief encounter yesterday with President Fernando de la Rua, of Argentina, was a surreal occasion.

It was a summit overshadowed by the Falklands, but where the disputed islands were not even on the agenda. It took place in the lap of tourist luxury, even as the host country is embroiled in a crisis that some fear could threaten Argentina's very democracy.

And then there was the setting. Sound, thunder and majesty abounded. But these had nothing to do with the confabulations of the leaders or the official helicopters buzzing overhead. The true star of the show was the world's widest waterfall – where the Iguazu river crashes 250 feet into a ravine, throwing up plumes of spray and dazzling rainbows.

Mr Blair had spent the morning at the Hotel das Cataratas, on the northern, Brazilian side, with Mr de la Rua and President Fernando Cardoso of Brazil. Cherie Blair donned a protective plastic mac against the spray. Then he crossed the bridge for a short date with destiny in Argentina, and with the non-subject of the islands that Argentines call Las Malvinas.

You could not but be reminded of the episode of Fawlty Towers, when a German family's visit prompts Basil's instruction to his staff: "Don't mention the war." Yesterday, no one was talking about the war. However much it believes that the Falklands/Malvinas belong to Argentina, the de la Rua government has something very different on its mind right now: the country's economic crisis.

This week, the Argentine parliament was left with no choice but to vote through a desperately unpopular "zero deficit'' reform package. Taxes are being raised and state-sector pay and pensions slashed, in an effort to persuade lenders to keep extending the credit without which Argentina, already three years in recession, could default on $128bn (£90bn) of public debt.

In Buenos Aires there were strikes and demonstrators took to the streets. But 600 miles away, in the hotel overlooking the falls where Mr Blair and Mr de la Rua were to hold their scheduled 45 minutes of symbolic talks, all was calm with the clientele rather too well-heeled to care whether their compatriots were getting restless.

A British visitor, however, could not fail to notice a different contagion from much closer to home. However exotic its setting, Iguazu proves just how small the world is. On crossing the bridge that Mr Blair was to take yesterday, drivers entering Brazil have to step out of their cars and walk on a squelchy mat reeking of disinfectant.

The officer mutters the word aftosa – but for a Briton, the familiar ritual makes knowledge of Portuguese superfluous. The Falklands may divide us but for the time being, Britain and Argentina are united by foot-and-mouth.