Earlier this month, the Argentine President Cristina Kirchner responded to high inflation and massive capital flight by picking up a diplomatic fight with London over the Falkland Islands, in U.K. possession since 1833. The renewal of Argentina’s demands over the islands were nicely timed to precede with the 30th anniversary of of the 1982 war with Great Britain, when Argentina tried to militarily reestablish sovereignty over the islands. Fortunately, the diplomatic skirmish did not escalate – again – into a militarized conflict.
Kirchner’s attempt to must regional support for her country’s claim to the Falkland Islands during the last Summit of the Americas (held in Cartagena, Colombia on April 14-15) did not go so well. Moreover, according to the Financial Times, here was behind-the-scenes talk, too, that Argentina might be kicked out of the Group of 20 leading industrial and developing nations.
After those bad news, back in Buenos Aires, Cristina returned to the offensive by announcing the re-nationalization of YPF, a Spanish-controlled oil company. Argentina’s Senate is expected on Wednesday to approve a bill to nationalise YPF and expropriate a 51 per cent stake from Repsol of Spain by a comfortable majority, slashing the Spaniards’ holding to 6.4 per cent. The bill would then pass to the lower house of Congress, where it is expected to be passed into law speedily. And Less than a week after Argentina incurred international condemnation for plans to nationalise Spanish-controlled oil company YPF, it was out seeking joint energy ventures with Brazil.
What will Kirchner do next after the nationalist dust of the YPF re-nationalization settles down?