Spain today raised its partners in the European Union (EU) a series of pressure measurements over Argentina, including the option of excluding trade negotiations with Mercosur, and hoped that this strategy will make access to Buenos Aires to seek a solution negotiated YPF case.
“We keep saying that the best thing that can happen is that we reach a negotiated settlement through dialogue,” said Spanish Foreign Minister, Jose Manuel Garcia-Margallo, after meeting with his EU counterparts in Luxembourg.
The goal, according to Garcia-Margallo, should be that the Spanish oil company Repsol obtain adequate compensation for the nationalization of its majority stake in YPF, and that this will avoid a “train wreck” that would, in his view, consequences for all the parties.
The minister stressed that Spain “is not discussing the energy sovereignty of Argentina” and that Buenos Aires can expropriate energy companies, but defends the need to respect the legal channels and pay the “fair price”.
“Now that you’ve probably trying to make is that Argentina found an interest in reaching an agreement through dialogue and negotiated with Spain on the valuation” YPF said.
For this, the Spanish strategy goes through all sorts of ways to use pressure, mainly through the European Union (EU) today reiterated its support for the government in Madrid.
Among the measures proposed by Spain and the Twenty-seven have committed to consider are the ability to enable complaints to the World Trade Organization (WTO) and excluding Argentina’s Generalised System of Preferences (GSP, tariff benefits) ahead of schedule in January 2014.
At the same time, Garcia-Margallo raised the option of the EU to continue negotiating the association agreement with Mercosur without Argentina.
“It’s something we have to study us and must also consider the Mercosur countries,” said Garcia-Margallo, who recalled that there is “precedent” that marked the progress in negotiating a free trade agreement with Peru and only Colombia after establishing the EU’s failure to achieve complete agreement of association, from region to region, with the Andean Community of Nations (CAN).
“It is likely that this is a solution that interests Brazil, who wishes to Uruguay, Paraguay,” he said.
The European Commission, negotiating with Mercosur on behalf of the Twenty, declined to comment on this possibility, according to EU sources.
At the same time, Garcia-Margallo expressed suspicion about the possibility that Argentina look to sell to a new foreign partner part of YPF Repsol has expropriated, considering that not in a position to tackle the debt of the company and investments to exploit new gas field Vaca Muerta.
If such suspicions are confirmed, according to Garcia-Margallo, “we find that there is no nationalization, but the substitution of a Spanish partner and probably Europe a partner of another nationality”, which would be a taking “arbitrary” “discretionary” and “contrary to legal procedures.”
The Spanish position against the expropriation of 51% of YPF shares belonging to the Spanish company Repsol today obtained the support of its European partners, the Spanish minister said after the meeting the EU’s top diplomat, Catherine Ashton.
According to EU sources, several foreign ministers of the EU conveyed their full support to Madrid during the ministerial meeting, including William Hague, British, while some did also told reporters.
“Spain is an EU member and you have to be in solidarity with Spain. I think we can not allow economic expropriations taking place in countries where there are EU members affected,” said the head of Foreign Luxembourg, Jean Asselborn, who called “pressure” on Argentina at G20.
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