2012-04-17

Argentina stabs a wounded and angry Spain

Argentina picked a fight with the United Kingdom over the Falklands, and now it has kicked Spain while she's down. Reeling from a weak economy and a brewing sovereign debt crisis, Spain was dealt another blow as Argentina nationalized a Spanish-owned energy firm. Many shareholders are Spanish banks, an asset loss than none of them needs right now.

Spain vows 'forceful' response to Argentine oil move
Spain denounced the "hostile" decision by Argentina to nationalise Spanish-owned oil company YPF, a subsidiary of Repsol, and warned Monday that it would take "clear and forceful measures" in response.

Argentina's decision had "broken the climate of friendship" between the two countries, Foreign Minister Jose Manuel Garcia Margallo told journalists, speaking after a crisis cabinet meeting called by Prime Minister Mariano Rajoy.

The government strongly "condemns... the decision to expropriate" a controlling stake in the Repsol subsidiary, he added.

"It's a hostile decision against Repsol, thus against a Spanish business, and thus against Spain," said Industry Minister Jose Manuel Soria, speaking at the same news conference.
Argentina picked a bad target. Whereas British social mood is relatively positive, Spain is ready to fight. Perhaps only Greece is more in the mood for a battle, should one present itself. Not only is Spain determined to fight, but the rest of the EU faces losses if Spain's financial system breaks down.. Thus, the entire EU will likely join in a response to Argentina.

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