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Argentinean president intends to seize control of oil company
By Catholic Online (NEWS CONSORTIUM)
April 18th, 2012
Catholic Online (www.catholic.org)
April 18th, 2012
Catholic Online (www.catholic.org)
Argentinean President Cristina Fernandez de Kirchner plans to seize
control of the nation's largest oil company YPF. Owned by Spain's
Repsol, the action has provoked an angry response from Madrid. There
have also been heated warnings from key trade partners, who said that
relations with Buenos Aires would be damaged by the move.
Kirchner says that the government would ask Argentina's senate, where her party controls a majority, to approve a bill to expropriate a controlling 51 percent stake in the company by seizing shares held exclusively by Repsol. She reiterates that energy was a "vital resource.
"If this policy continues - draining fields dry, no exploration and practically no investment - the country will end up having no viable future, not because of a lack of resources but because of business policies," she said.
Spain has called Kirchner's actions as a "hostile" move and warns that it would take "clear and forceful measures" in response.
Spain's foreign minister Jose Manuel Garcia Margallo says that Argentina's decision had "broken the climate of friendship" between the two countries, He spoke after a crisis cabinet meeting called by Mariano Rajoy, the prime minister.
"It's a hostile decision against Repsol, thus against a Spanish business, and thus against Spain," Spanish Industry Minister Jose Manuel Soria said at the same news conference.
"The government is announcing that it will take all the measures it considers appropriate to defend the legitimate interests of Repsol and of all Spanish businesses abroad," he added.
YPF previously had a relatively harmonious relationship with Kirchner. Her increasingly interventionist economic policies have infuriated critics.
The president praised YPF when it found massive resources of shale oil and natural gas in late 2010.
A surging fuel import bill however pushed a widening energy shortfall to the top of her agenda at a time of worsening finances in Latin America's number three economy.
"This president is not going to answer any threat, is not going to respond to any sharp remark, is not going to echo the disrespectful or insolent things said," Kirchner said earlier this week to applause from business, union and political leaders. "I am a head of state and not a hoodlum."
Spain and the European Union last week warned that Argentina would damage relations with them if it went ahead and nationalized YPF.
"We are not going to have a nationalization. We are going to have a recovery" of the company, which had been state-controlled until 1999, Kirchner said, insisting the group would operate "as a corporation, with professional directors."
© 2012, Catholic Online. Distributed by NEWS CONSORTIUM.