April 19, 2012 / 2:49 PM / 5 years ago

World Bank says Argentine move on YPF 'a mistake'

2 Min Read

World Bank President Robert Zoellick speaks at an event on "Social Safety Nets" building in Washington April 18, 2012.Yuri Gripas

WASHINGTON (Reuters) - The head of the World Bank on Thursday condemned Argentina's move to seize control of the country's biggest energy company from Spain's Repsol, joining a chorus of international criticism.

President Cristina Fernandez unveiled plans on Monday to seize a 51 percent controlling stake in YPF (YPFD.BA) by expropriating almost all of Repsol's shares in the firm.

"It's a mistake," Robert Zoellick, the outgoing president of the World Bank, told a news conference at the opening of World Bank and International Monetary Fund meetings of finance chiefs in Washington.

"I think it is a symptom we have to watch out for under economic pressure whether countries will move, ... respond more to populism, respond more to protectionism," he said. "I think it was the wrong thing to do."

Argentina's aggressive move has already drawn condemnation from Madrid to Washington and warnings that investors could shun Latin America's No. 3 economy.

Argentine Economy Minister Hernan Lorenzino will attend the weekend meetings in Washington to explain Argentina's position, which has been supported by some of the country's left-leaning allies including Venezuelan President Hugo Chavez.

Zoellick is to step down as president of the World Bank on June 30.

Reporting By Lesley Wroughton; Editing by Helen Popper and Leslie Adler

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