EU exerts Morales pressure

Bolivia will be under pressure from the EU at a Europe-Latin America summit in Vienna.

The country’s left-wing populist president Evo Marales has offended international opinion by nationalising oil and gas production – including assets owned by big European interests.

Oil companies including the Spanish Repsol-YPF, British BP and French have all lost out after foreign companies were given six months to negotiate new contracts or leave.

Bolivia might be the most sensitive issue of the trade discussions starting today in Vienna between Europeans and countries from Latin America.

European trade commissioner Peter Mandelson has already warned of the risks EU investments fleeing Bolivia after the nationalisation of its energy sector.

Morales stunned trade partners at the beginning of the month when he announced Bolivia was taking control of oil and natural gas resources - gas reserves total 53.3 trillion cubic feet.

The Bolivian president gave 180 days to foreign firms to sign new contract with his government.

The Spanish government did not wait long to engage talks with Bolivia, Prime Minister Jose Luis Rodriguez Zapatero saying the issue required "diplomatic and political efforts".

However, the Bolivian issue combined with recent decision of Venezuela’s president Hugo Chavez to withdraw from the Andean group of trading countries risk to underpin trade discussions in Vienna.

The Bolivian president is expected at the European Parliament next week in Strasbourg.

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