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Tuesday, April 17, 2012

Furious Spain rails against Argentina

Ministers José Manuel García Margallo (L) and José Manuel Soria address the media yesterday.

Spanish government attacks CFK for breaking agreement

The Spanish government yesterday condemned the decision by the Argentine government to expropriate 51 percent of shares in YPF, describing the measure as “arbitrary” and “discriminatory”.

Spain also announced that it was working on a “clear and forceful response” in order to defend Repsol oil company and the interests of other Spanish companies.

Several hours after President Cristina Fernández de Kirchner announced the purchase of the majority shares in YPF, Spanish Prime Minister Mariano Rajoy’s administration issued a statement insisting that Argentina’s decision “breaks off the traditional climate of friendship between both countries.”

The Spanish government spokesmen were Foreign Minister José Manuel García Margallo, and Industry Minister Juan Manuel Soria.

“We fully condemn Argentina’s arbitrary decision to expropriate the shares. The measure breaks off the cordiality and friendship climate which we have had historically,” reported García Margallo opening the press conference.

The Foreign Minister pointed out: “The announcement breaks the verbal agreement reached on February 28, 2012, when the company authorities met with Argentine Federal Planning Minister Julio De Vido and Economy Minister Hernán Lorenzino.”

He added: “Not only will the measure affect the interests of Spanish businessmen, but it is also extraordinarily detrimental for the Argentine people because it destroys trust for future international investments and legal security.”

Later, Soria stated that the intention to expropriate the majority shares held by Repsol, is “discriminatory” because the project “only affects Repsol shares” and not other Argentine partners.

The Minister warned that “this is hostile behaviour against Repsol, a Spanish company, thus against the Spanish government, which will carry consequences” and highlighted that the Argentine counterpart did not want to hold “talks and negotiations.” Rajoy’ s administration is analyzing which counter-measures to pursue, while waiting for an official statement of support from the European Union.

MEDIA RESPONSE. After the takeover was rumoured last Thursday, Spanish media has been rife with tense commentaries and accusations regarding the issue, culminating in yesterday’s actual expropriation.

El País’s website stated that “Spain announces reprisals against Argentina’s hostile decision” and “Repsol will take legal actions to defend itself.”

“After several weeks threatening that they will take over the company, the Argentine President announced that hydrocarbon production is a public interest.

The company’s shares, the trading of which was eventually suspended, dropped 19 percent on the New York stock exchange.

YPF represents half of Repsol’s total production,” added the newspaper.

Likewise, El Mundo’s lead headline stated “Kirchner expropriates YPF”, adding that “Argentine evaluation courts will decide how much to pay for the company”.

Other headlines read: “Argentina expels Spanish directors from YPF headquarters” and “Government: a hostile decision.”

The El Economista business site reported that “despite warnings from Spain and Brussels, President Cristina Fernández de Kirchner’s government ordered the expropriation of 51 percent of YPF.”

Meanwhile, conservative newspaper ABC published an article written by Jaime González entitled: “Who laughs last?”, in which the journalist stated that “the Argentine President has made the worst mistake of her term in office: placing Argentina in the field of ‘squatter’ nations, or the ones who steal rights.”

Herald staff with agencies

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