Argentina blasted for YPF plan

The European Union and Spain blasted Argentina on Tuesday for its planned nationalization of the energy company YPF, currently controlled by the Spanish firm Repsol.

European Commission President Jose Manuel Barroso said he was "seriously disappointed" by the seizure and that he "expects the Argentinean authorities to uphold international commitments and obligations."

Commission spokesman John Clancy said a treaty between Spain and Argentina on bilateral investment "clearly contains clauses for nationalization, including adequate compensation and resolution of disputes." A meeting between the EU and Argentina scheduled for Thursday and Friday was postponed over the take-over, as Brussels said it was exploring "all possible options."

The Argentinean ambassador to Madrid was also summoned, and Spanish Industry Minister Jose Manuel Soria threatened consequences "over the next few days... in the diplomatic field, the industrial field, and on energy."

Repsol, meanwhile, said the take-over was "clearly unlawful and seriously discriminatory" and that it would pursue legal action.

Pressure to increase production

Argentine President Cristina Fernandez de Kirchner announced on Monday that she would ask congress - where her party holds a majority - to approve a law that would expropriate 51 percent of the company's shares by taking over stock held by Repsol.

Her center-left government has heavily pressured YPF to increase production, accusing the firm of "draining fields dry, no exploration and practically no investment."

"If this policy continues... the country will end up having no viable future, not because of a lack of resources but because of business policies," she said.

acb/ccp (AFP, Reuters, dpa)