Paraguay threatens Argentina, Brazil on energy

REUTERS

Paraguay's President Fernando Lugo (front L), Vice President Federico Franco (front C) and his wife Emilia Alfaro attend a mass to commemorate the country's 201st year of independence, at the Metropolitan Cathedral of Asuncion, in Asuncion May 14, 2012.

Asuncion - Paraguay's new President Federico Franco is talking tough with Argentina and Brazil, threatening not to “give away” energy to his neighbors and instead use power generated by joint projects at home.

“When are Brazil and Argentina going to respect us? When the government tells them, 'Actually, we are going to use our own energy. Paraguay is changing its position. It is no longer going to give away its energy',” Franco said.

“Is it fair to pay the same price for power for 50 years?” the president said Wednesday in a speech on energy policy at the defense ministry.

“I refuse to accept that Paraguay has to give its energy away as a gift.”

Brazil and Paraguay jointly operate the massive Itaipu hydroelectric dam on their common border. Argentina and Paraguay have a similar arrangement for the Yacyreta power station.

Argentina and Brazil have pulled their ambassadors out of Asuncion and do not recognize the government of Franco, who replaced Fernando Lugo after he was abruptly ousted from power in June over his handling of a deadly land dispute.

The Mercosur regional trading bloc suspended Paraguay from participating until new elections are held in the South American country. The bloc includes Argentina, Brazil and Uruguay, and recently welcomed Venezuela as a member.

Brazil reacted cautiously to Franco's statement, with foreign ministry spokesman Tovar Nunes saying it would maintain good relations with Paraguay with respect to the Itaipu project. - Sapa-AFP