Argentina Repsol seizure 'very negative signal': Ashton
(STRASBOURG) - Argentina's decision to nationalise a part of Spanish oil giant Repsol sends a "very negative signal" to global investors, EU foreign affairs chief Catherine Ashton said Tuesday.
Citing "cause for grave concern," the European Union's top international representative said at the European Parliament that the decision would alarm international financiers "and could seriously harm investor confidence (in) Argentina."
Repsol has vowed to fight for at least $10 billion (8.0 billion euros) in compensation for the expropriation of subsidiary YPF, which was announced overnight in Buenos Aires by President Cristina Kirchner.
"These acts will not remain unpunished," Repsol executive chairman Antonio Brufau said earlier as shares in his company plummeted more than seven percent on the Madrid stock market.
After European Commission president Jose Manuel Barroso said he was "seriously disappointed" by the decision, Ashton said the action creates "legal insecurity for all European Union and foreign firms in the country."
She added she was all the more alarmed by threats to further international investments in telecoms and banking, and said "all possible options are being analysed."
With Argentina and EU heavyweight Britain already ratcheting up tensions in the South Atlantic with military posturing over the Falkland Islands, the EU on Tuesday cancelled wider cooperation talks with Buenos Aires diplomats.
"As a result of this announcement, we have decided to postpone the EU-Argentina Joint Cooperation Committee which had been scheduled to take place on Friday this week," Ashton said, adding that the row will be discussed by EU foreign ministers meeting in Luxembourg on Monday.
The European employers' representatives, Business Europe, also wrote to Kirchner on Tuesday, warning that any breach of the "basic principles" of protected investment could trigger "devastating international consequences."
The letter said the sort of decision imposed on YPF "will impose considerable costs for EU industries and businesses and limit the export of products, services and investments to Argentina."
It added: "We consider that these trade restrictions are incompatible with Argentina's commitments in the World Trade Organization" and that protectionist policies "are already having a significant deterrent effect on foreign investment and job creation in Argentina."
Business Europe said it therefore "calls on the EU to immediately take all necessary action to defend the EU's commercial and investment interests in Argentina."
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