clock menu more-arrow no yes

Filed under:

EU parliament slams Argentina's YPF seizure

BRUSSELS — The European Union parliament on Friday condemned Argentina's move to seize control of the YPF division of Spanish oil and gas giant Repsol and demanded that EU takes action against Buenos Aires at the World Trade Organization.

The parliament also called on the EU to look at the "possible partial suspension of the unilateral tariff preferences" as a way of punishing any country that attempts to nationalize a European company's assets.

Argentina says it is making the move — which would take control of 51 per cent of YPF, leaving Repsol with a 6 percent stake — because Repsol did not invest enough in the country's oil industry.

Repsol and Spain have slammed Argentina's re-nationalization of YPF as outright "pillaging" and an attack on their interests.

The European parliament called the re-nationalization "an attack on the exercise of free enterprise and the principle of legal certainty" which hurt Argentina's investment climate.

The resolution, backed by the major parties in the Strasbourg-based legislature, also calls on European Commission to take up the issue at the WTO and the G20 trade organization and explore measures to better protect EU interests in future.

The Group of 20 industrial powers has a summit in Mexico in June and could bring Argentine President Cristina Fernandez and Spanish Prime Minister Mariano Rajoy together face to face for the first time.

Meanwhile, Repsol's shares continued to tumble Friday , down 1 percent from Thursday's 14.52 euros. Earlier in the week, they fell between 4 and 6 percent every day since Argentina made the announcement on Monday it was taking control of YPF.

The European parliament complained that Repsol had "been the target of a public harassment campaign" in Argentina, resulting in the plummeting of its shares.

Spain is the top foreign investor in Argentina, ahead of the United States. Spanish direct investment in Argentina totaled $23 billion in 2010. That was 26.3 percent of the total invested in that country, compared with 16.8 percent for the United States, according to the Argentine central bank.