Friday, April 20, 2012

Kirchner & Argentina Going Marx!



As we continue to battle creeping socialism and the loss of freedoms here in the United States, the world around us continues to embrace Marxist philosophies.  Is Cold War II looming?!

Russia under Putin & Venezuela under Chavez have lit the way for Argentina's Christina Kirchner.  Nationalization of the oil industry is one of the first steps.  Let this serve as an example of what happens when we become complacent about our freedoms!  We must be vigilant!!!

By Liliana Samuel - 4/19/2012

..Facing intense criticism over the nationalization of its biggest oil firm, Argentina on Thursday ordered the seizure of YPF Gas, another group controlled by Spain's Repsol, a move expected to further inflame tensions.

In a case that has sparked fears of a new wave of expropriations, a statement published in the official gazette said the Argentine government was declaring YPF Gas a public utility and taking 51 percent of the shares.

YPF Gas is not technically part of the YPF oil group ordered nationalized this week, leading to global condemnation, but a separate company.

However, an 85 percent stake in the gas firm is owned by Repsol Butano SA, a division of the Spanish energy giant.

Officials said the move was an extension of the takeover of YPF, the big unit of Repsol that Argentina decided to seize this week.

The government statement indicates that YPF Gas "plays an essential role in Argentina's hydrocarbon policy."

YPF Gas is the main provider of fuel tanks that are supplied to low-income households in the South American nation that are not on the gas network, officials said.

The move expands the nationalization effort ordered by Argentina, which claimed the Spanish firm was failing to invest in the country and forcing it to import more of its energy supplies.

Spain, the United States, the IMF, the European Union and others lined up to take turns slamming the move by President Cristina Kirchner.

During a visit to Colombia on Thursday, Spanish Prime Minister Mariano Rajoy again slammed the move as "an injustice," but declined to comment on how his government might retaliate.

Spain and the European Union have warned that the nationalization would damage relations and others have voiced concerns of a chilling effect on capital investment in the region.

On Thursday, World Bank head Robert Zoellick added his criticism to Argentina's move.

"I think it's a mistake and I think it's a symptom that we have to watch out for -- if under economic pressure, whether countries will move to more national, autarchic policies, respond more to nationalism, more to protectionism," Zoellick said at a news conference.

"So I think it was the wrong thing to do," he told reporters as the World Bank and International Monetary Fund spring meetings got underway in Washington.

Later he told CNN that Argentina should concede the move is a mistake and reverse it.

"This is not the time to be playing with fire, and ultimately, it will leave Argentina behind in the international economy, and that hurts the people of Argentina, and that is who I am concerned about," he said.

"What investor in his right mind would put money into a country where people are taking away private property?"

Repsol bought Yacimientos Petroliferos Fiscales in 1999 for $15 billion in what was the biggest operation of the privatization program of former Argentine president Carlos Menem.

Credit rating firm Standard & Poor's downgraded Spanish oil firm Repsol's rating by one notch Thursday.

S&P lowered the rating to BBB- from BBB, indicating strong creditworthiness but an increased vulnerability to economic shocks, with a negative outlook, it said in a statement.

"The nationalization of YPF will materially worsen Repsol's credit metrics," since the Argentine subsidiary accounted for a large share of Repsol's profits last year, it said.

US ratings agency Moody's downgraded YPF on Tuesday.

YPF shares, which have tumbled some 70 percent since January and accelerated losses this week, rebounded nearly 10 percent in New York in late trade at $14.42.

Kirchner has argued that the expropriation was justified because YPF crude production had dropped while oil and gas imports doubled in 2011. Imports are forecast to triple by the end of the year.

Argentina also faces a drop in its trade surplus -- down 11 percent in 2011 -- which is its main source of hard currency since foreign credit markets closed their doors after the 2001 debt default.

http://ca.news.yahoo.com/argentina-orders-seizure-another-repsol-unit-175049979.html

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