Tough fight in store against YPF seizure

YPF politics: Analysts warn that Spain may have limited means to retaliate over company seizure

Spain has threatened to retaliate against Argentina for nationalising the Repsol-controlled local unit YPF, but Madrid will find it hard to put real pressure on a maverick nation that has been shut out of world debt markets and has ignored international fines in previous disputes.

"The threat really has very little credibility. What measures can they take?" Jose Ignacio Torreblanca, head of the Madrid office of the European Council on Foreign Relations, told Reuters.

He said Argentina has little investment in Spain, while Spanish companies with investments in Argentina's highly regulated telecommunications and utilities sectors could suffer if tensions escalate between the two countries.

Investors' dismay continued on Wednesday over the Argentine government's plans, announced Monday, to expropriate 51% of the firm.

The United States called the plan a "negative development" that could hurt the Latin American country's economy…

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