PUERTO VALLARTA: Spanish Prime Minister Mariano Rajoy said Tuesday that Argentina's decision to expropriate Spanish oil company Repsol's YPF subsidiary had broken the country's "good understanding" with Spain.
"The decision breaks the previous good understanding between the two countries," Rajoy said in his first reaction to Monday's announcement, at the World Economic Forum on Latin America in Mexico.
It was a "negative decision" that was "without justification," he added.
The government of President Cristina Kirchner on Monday declared YPF, the country's largest oil company, subject to expropriation and submitted a bill to parliament that would give the state and oil-producing provinces a 51 percent stake in the company.
The move sparked anger in Spain and criticism from the European Union and Mexico.
It would not only affect Argentina but also the efforts of other Latin American countries "to make the region an attractive destination" for investments, Rajoy warned Tuesday.
Rajoy sought to rally support for Spain's position among some 900 participants from 70 countries represented at the Mexico meeting in the Pacific resort of Puerto Vallarta.
Mexico's President Felipe Calderon offered strong support late Monday in a speech to young business leaders.
"It seems very regrettable to me that the government of Argentina, our friend (President) Cristina Fernandez (de Kirchner), has taken a measure that will do no good to anyone," Calderon said.
"All developing nations need investment and no one with their wits about them invests in a country that expropriates investments," Calderon told the group. "Argentina can rectify this measure."
Mexican state oil company Pemex has a 9.5 percent stake in Repsol, whose share prices plummeted after the announcement.
Repsol vowed Tuesday to fight for at least $10 billion (8.0 billion euros) in compensation from Argentina. Spain's government had warned it would consider expropriation to be "hostile."