MercoPress. South Atlantic News Agency

IMF says investment climate in Argentina unpredictable; EC cancels bilateral meeting

EC president Barroso: “seriously disappointed”

The European Commission called off a meeting with officials in Argentina after President Cristina Fernández revealed plans to expropriate 51% of YPF from its mother corporation Spain’s Repsol.

YPF has been under intense pressure from the Argentine government to boost production, and its share price has plunged due to months of speculation about a state takeover.

EC spokesperson Pia Ahrenkilde Hansen said on Tuesday the meeting was part of an existing bilateral trade and economic treaty between the EU and Argentina and had been scheduled for this Thursday and Friday April 19, 20.

“The meeting was postponed until further notice due to the tension created by this current situation, the European Commission decided to postpone the meeting” said spokesperson Hansen.

Meanwhile from Brussels EC President Jose Manuel Barroso said he expected Argentina to uphold international agreements on business protection with Spain over its plan to take over the Argentine unit of oil major Repsol.

“I am seriously disappointed about yesterday's announcement. We expect Argentine authorities to uphold their international commitments and obligations, in particular those resulting from a bilateral agreement on the protection on investments in Spain.“

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

From Washington IMF economist Thomas Helbling regretted Argentina’s decision to expropriate 51 percent of the 57.43 share-package Spanish oil company Repsol owns.

One of IMF top executive, Heldbling said such decisions “make the Argentine economy unpredictable,” also creating an unfavourable milieu for international inversion.

“There has been a certain deterioration of the environment for investment in Argentina on the past years,” he said during a press conference in Washington DC.

The economist said that those kinds of decisions “in general worsen the investment mood, not helping long term development”.