José Manuel Barroso, the president of the European Commission, has said that he is “seriously disappointed” by Argentina’s decision to nationalise the oil company YPF, in which Spanish firm Repsol has a majority stake.
The Commission has threatened to use “all options available” and pledged its full support to Spain over the issue.
“We emphasise the need for mutually agreed solutions which do not harm the business environment,” Barroso said after talks in Berlin with Germany’s new president, Joachim Gauck.
“I am seriously disappointed about yesterday’s announcement,” he said, adding that he expected the authorities in Argentina to “uphold their international commitments and obligations”, including bilateral agreements between Spain and Argentina on the protection of investments.
Repsol has said that it will demand compensation over its 57% stake in YPF, with some observers estimating that it could seek up to €8 billion. “These acts will not remain unpunished,” said Antonia Brufau, the firm’s executive chairman.
Repsol accused Argentina of pursuing the nationalisation to cover up the country’s economic and social problems. Brufau said the company would seek international arbitration.
The Commission said it had already told Argentina’s government about its dissatisfaction with the move, which, a Commission spokeswoman said, sent a “very negative message” to international investors. She said the Commission feared that the decision could seriously harm the business environment in Argentina, which would create “legal insecurity” for Repsol and other EU firms. Karel de Gucht, the European commissioner for trade, is to send a letter to Argentina’s trade minister outlining his concerns.
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The spokeswoman said that the Commission was looking at “all options available” but did not say what these would be. The Commission has cancelled an EU-Argentina joint committee, which was to take place on Thursday and Friday (19-20 April).
The nationalisation was announced on Monday (16 April) at a meeting between Argentina’s president Cristina Fernandez de Kirchner and her cabinet and provincial governors.