MercoPress. South Atlantic News Agency

Argentina takes official control of YPF; Rajoy asks: who can trust that country?

Rajoy said the re-nationalization has more to do with Argentina’s standing weakness than Spain’s current fragility

The Argentine decision to seize control of 51% of YPF oil and gas giant came into effect on Monday as a decree was published on the Official Gazette. From Spain a new barrage of criticisms in support of Repsol and condemning Argentina started the week.

The law numbered 26.741 and made official with decree 660/2012 establishes that YPF has an essential role in Argentina’s hydrocarbon policy, therefore, it is considered to be “of national public interest.” The nationalization of the company, the rule establishes, should be at the top of the national priorities.

“Amongst Argentina’s main objectives with YPF are to ensure abundant hydrocarbons’ supply, as well as its exploration, industrialization, transportation and commercialization,” the decree stated.

Last Friday during a nation-wide televised speech, President Cristina Fernández praised the approval of the YPF expropriation law on Friday, which had been passed by the Lower House on Thursday.

With the expropriation, the national government now owns 26.03% of YPF shares while the oil rich provinces control 24.99% of the stakes. The Petersen Group accounts for other 24.99% of the shares and the remaining 17.09% of stocks are listed on the Buenos Aires and New York Stock Exchanges.

From Madrid Spain’s President Mariano Rajoy said that the seizure of YPF from Repsol has to do more with Argentina’s weakness than Spain’s current fragility.

“The expropriation has to do with a search for hiding points of weakness by taking some decisions that show certain authority” Rajoy said.

He added that “this kind of measures affect in a much larger way the country that takes them than the expropriated company. Who can now trust and invest in a country that takes such decisions without giving a single explanation?”

Likewise Spain’s Vice President Soraya Sáenz de Santamaría said that Latin American countries must ensure legal security if they want to keep receiving an influx of investments.

Speaking during a meeting of Ibero-American ministries, Saenz de Santamaria defended the need of Latin American being a region “open to the world and business.”

“Spain is more than willing to renovate its relationships with all Spanish-speaking countries in a sense of mutual respect for democracy”, she said.

A total of 22 Spanish-speaking countries are participating in the meeting. Argentina has not sent any minister, but a diplomat representative from the Argentine Embassy in Madrid.