STEVE INSKEEP, HOST:
Now as you can imagine, when South American governments move to nationalize Spanish companies, the government of Spain is not so happy.
We have that side of the story from Lauren Frayer.
LAUREN FRAYER, BYLINE: Last month it was Argentina Spanish officials were criticizing. This week it's Bolivia, which has taken over Red Electrica, a Spanish company that owns most of that country's power grid, because it didn't see enough investment.
Spain's economy minister, Luis de Guindos, said the takeover will hurt Bolivia in the long run.
LUIS DE GUINDOS: (Spanish language spoken)
FRAYER: The Spanish government does not like this kind of decision, de Guindos told reporters yesterday in Brussels. We believe it's essential to maintain legal security in the investment process in countries like Bolivia, he said.
Spanish officials say Bolivia and Argentina will pay the price in the long run, as investors become weary of doing business if their assets could ultimately get seized. But Spain stands to suffer as well. The government owns a 20 percent stake in Red Electrica, which it will now lose. Some compensation is forthcoming, but no word on how much.
And this couldn't come at a worse time for Spain. One in four here is jobless -the highest rate in Europe. Spanish banks are struggling to survive under the weight of too many bad real estate loans. And that's reverberated through the economy.
For Spanish companies with traditionally strong ties to South America doing business abroad is becoming more important, especially considering the economy back home.
XAVIER VIVES: Then some companies, when they want, they are thinking about expanding, for example, in Argentina or Bolivia, they'll think twice.
FRAYER: Xavier Vives, an economist at Spain's IESE Business School, says the number of safe places to invest in South America is shrinking. Spanish companies fear their assets could be in jeopardy across that continent.
VIVES: What will be the impact on many other investments - that for example Spain has in Argentina or in other countries - which have also populist governments, and that may think of an easy way to get quick cash but then have a long term investment problem.
FRAYER: Spanish leaders have been lobbying for EU sanctions against Argentina for its oil company takeover. Now the same could be true for Bolivia, though those efforts are still behind closed doors.
An EU trade spokesman has issued a statement calling Bolivia's move a negative signal to international investors, but stopped short of announcing any formal punishment.
For NPR News, I'm Lauren Frayer in Spain. Transcript provided by NPR, Copyright NPR.