EU voices concern over Argentina YPF seizure

Reuters News
|
Posted: Apr 17, 2012 9:04 AM
EU voices concern over Argentina YPF seizure

BRUSSELS (Reuters) - EU officials on Tuesday expressed serious concern at Argentina's plan to seize control of oil firm YPF from Spanish energy major Repsol while cautioning that current EU rules limited their possible responses.

Argentine President Cristina Fernandez unveiled plans on Monday to nationalize a majority stake in YPF, drawing warnings from key trade partners.

"We expect Argentinean authorities to uphold their international commitments and obligations, in particular those resulting from a bilateral agreement on the protection on investments in Spain," European Commission President Jose Manuel Barroso told reporters.

His spokeswoman, Pia Ahrenkilde Hansen, said that the executive European Commission would take two immediate steps.

EU Trade Commissioner Karel De Gucht would write to Argentina's trade minister to "reiterate our serious concerns" while the Commission and the EU foreign policy chief would postpone an EU-Argentine joint committee meeting scheduled for April 19 and 20.

The Commission would analyze available options, she told a news conference in Brussels.

"I don't think we are in a position to or wish to detail any such options at this point," Ahrenkilde Hansen said.

The EU was supposed to have responsibility for dealing with investment disputes under a new architecture introduced two years ago. Known as the Lisbon Treaty, the framework was designed to make the EU more efficient and coherent.

But this new role has not yet been converted into regulations to enable the Commission to act, an EU official said.

"The full proposal is still being developed," said John Clancy, spokesman for De Gucht, adding: "In this particular issue, Spain will be looking at its actual bilateral investment protection agreement to see how it best can respond."

Spain said on Monday it would defend national interests in the case, but that its government had yet to decide how.

YPF, Argentina's leading energy company, has been under intense pressure from Fernandez's centre-left government to boost production, and its share price has plunged due to months of speculation about a state takeover.

Barroso said he hoped to persuade Argentina to come to an agreement that would fix the problem.

"We emphasize the need for mutually agreed solutions which do not harm the business environment," Barroso told reporters.

(Reporting by Sebastian Moffett; Editing by Rex Merrifield and David Cowell)