* Move to seize control of YPF stirs nationalist sentiment
* Crisis-weary Argentines wary of big business, finance
* Move could strengthen President Fernandez politically
By Helen Popper and Hilary Burke
BUENOS AIRES, April 17 Argentina's drive to
seize control of leading energy company YPF from Spain's Repsol
may have outraged European trade partners and foreign investors,
but many ordinary citizens hailed it as virtually heroic.
The move by combative President Cristina Fernandez appealed
to Argentines who are critical about the vagaries of global
finance and the controversial privatizations of the 1990s - a
decade remembered for rampant corruption and factory closures in
Latin America's No. 3 economy.
Fernandez loyalists pasted "Thank You Cristina" posters on
government buildings in the capital Buenos Aires and supporters
of the expropriation drive praised the president's boldness.
"It's about recovering what's ours," said Julio Olaz, a
passerby in downtown Buenos Aires. "We need to get together and
make sure Argentina belongs to Argentina and not to foreigners."
The takeover move could help Fernandez regain the political
initiative after a series of unpopular policy moves and a
corruption probe involving her vice president that have eroded
her approval ratings since her landslide re-election in October
Fernandez, faced with a widening energy shortfall as
Argentina's fuel import bill surges, says her only concern is
protecting the national interest by guaranteeing future energy
supplies and righting the wrongs of the free-market policies
widely blamed for precipitating a sharp economic crisis and debt
default in 2001/02.
"Companies that operate in Argentina, even when their
shareholders are foreign, are Argentine companies. Don't anyone
forget that," the fiery Fernandez said on Monday, standing
beside an image depicting famous first lady Evita Peron, to whom
fellow Peronist Fernandez is sometimes compared.
Argentina's move on YPF , which was fully
state-owned for 70 years before its privatization, is thought to
be one of the biggest takeovers in the natural resources field
since the seizure of Russia's Yukos oil giant a decade ago.
But it follows a steady trend toward resource nationalism in
commodities-rich Latin American countries governed by leftists
such as President Hugo Chavez of Venezuela and Bolivian
President Evo Morales, both close allies of Fernandez.
Chavez applauded her move and rejected European "threats and
efforts at intimidation."
Fernandez, who started her political career in an oil-rich
Patagonian province, has gradually tightened state control over
the economy since she was elected to succeed her late husband,
Nestor Kirchner, in 2007.
At the height of the global financial crisis, she shook
markets with a nationalization of some $30 billion in private
pension funds. At around the same time, she renationalized
airline Aerolineas Argentinas, which had also been privatized in
Both measures were popular and won broad support from
Argentina's mainly left-leaning opposition in Congress, which
Fernandez controls, pointing to easy passage for the YPF
expropriation bill despite criticism of Fernandez's approach
from some rightist and centrist leaders.
"(Her) objectives are shared, but the expropriation will
bring consequences that must be considered," said Oscar Aguad, a
lawmaker from the opposition Radical party.
But even as the move on YPF draws condemnation from some
quarters, it may strengthen Fernandez's political capital at
The country's most-powerful trade union leader, Hugo Moyano,
who has been at odds with the government over surging inflation
and efforts to cap wage rises, praised Fernandez's plans.
"Despite the pain over the plundering of our resources
during 20 years of occupation, we welcome the start of a new
era," Moyano's CGT labor federation said in a statement.
Fernandez's Peronist party, which has dominated Argentine
politics for seven decades, relies heavily on support from the
country's mighty trade unions, explaining Fernandez's emphasis
on protecting jobs and local industry whatever the cost to the
country's reputation abroad.
Even before the condemnation over YPF, international
patience with Argentina was wearing thin, partly due to waning
sympathy over the 2001/02 crisis that plunged millions into
poverty but also because of Fernandez's rule-breaking policies.
The International Monetary Fund has given the government an
ultimatum to overhaul its widely discredited inflation data, and
Washington recently suspended trade benefits because of the
Argentina's failure to pay two compensation awards.
The U.S. State Department said it was tracking developments
related to YPF.
But with YPF's seizure winning broad support at home,
Fernandez is unlikely to take a softer line.
"It's the best news we've had of late," Alicia Muzio, a
Fernandez supporter, told Reuters Television. "Together with the
nationalization of the pension funds, water and post services
and Aerolineas, this is excellent news."
Political analyst Graciela Romer said while some leftist
supporters back the oil firm's renationalization on ideological
grounds, most voters approve because they think the free-market
reforms of the 1990s failed so spectacularly.
"They left societies much poorer, with greater inequality.
And that's why people turned to the state again, it's less
ideological than it is pragmatic," Romer said. "They see this as
a possible way to improve people's quality of life."