Goals from Oscar Cardozo and Denis Gonzalez put them 2-0 up in the second period but 68th and 77th minutes denied them victory.
Balbuena earned his 10th international cap and will be looking for a place in the side that meets Argentina in their second group B fixture on Wednesday.
Elsewhere Pablo Fornals came off the bench but was unable to prevent Spain U21 from falling to a 3-1 defeat to hosts Italy in their UEFA U21 Championship opener.
Fornals will hope for more when Spain take on Belgium on Wednesday, looking to get the campaign back on track.