Morales attacks 'Western pillagers' at EU summit

A summit of European and Latin American countries was blown off course before it began yesterday as Bolivia's President claimed that nationalisation of energy resources was a natural reaction to five centuries of foreign pillaging.

At the start of the biggest diplomatic event in Austria since the Congress of Vienna, Evo Morales, the new Bolivian leader, defended a decision to bring natural gas resources under state control, saying foreign firms had "betrayed" Bolivia.

"For more than 500 years, our resources have been pillaged. This has to end now," he said at the beginning of a meeting expected to be dominated by energy and trade issues.

The Bolivian President said he was "not going to limit ourselves to oil resources", adding: "We are also to finish with huge land ownership, especially on unproductive lands."

The abrupt nationalisation of Bolivian energy resources has caused alarm in Spain, the UK and France, all of which have large energy investments in Bolivia. Mr Morales has given foreign firms six months to renegotiate contracts, and said that he was looking for "partners - not bosses - to exploit our natural resources". He added: "Before, Bolivia was considered to be a no-man's land. Now, it belongs to its own people, particularly its indigenous peoples."

European leaders tried to play down the rift with Bolivia, and Spain's Prime Minister, José Luis Rodríguez Zapatero, will meet with Mr Morales today. The Spanish energy giant Repsol-YPF, which controls 25.7 per cent of Bolivian gas production, has privately urged ministers to try to calm the situation. BP, British Gas and France's Total also have big investments in the country. But the comments from Mr Morales will hardly have reassured them. He accused foreign oil firms of acting illegally, saying dozens of contracts secretly negotiated without congressional approval were unconstitutional, and claiming Bolivian ownership of foreign assets and investments. Non-Bolivian companies have invested more than £1.9bn in the country since 1996.

Mr Morales argued: "There are companies in Bolivia that don't respect Bolivian laws. They have betrayed our country."

Diplomats yesterday argued that the Bolivian President and his close ally Hugo Chavez, Venezuela's President, were in a different category to more centre-left heads of government such as Brazil's more centrist President, Luis Inacio Lula da Silva. In fact the Bolivian nationalisation has hit Brazilian interests, straining relations between the two governments.

Mr Chavez is also expected to defend his moves to increase taxes on foreign energy firms in Venezuela. He plans a private visit to London this weekend and, while he has not asked for a meeting with Tony Blair or any minister, he will speak at an event hosted by London's Mayor, Ken Livingstone.

Mr Blair, who arrives in Vienna today, will join leaders of at least 58 countries from the EU, Latin America and the Caribbean gathering in the Austrian capital for the annual talks on strengthening economic and political ties.

Fancy footwork from world leaders

The EU has tried quite a few things to make itself interesting. But not until yesterday had a summit host made his fellow leaders play football.

Fourteen goals, a penalty shoot-out and an injured commissioner made it marginally more entertaining than the average summit. But it is unlikely that any of them will be giving up the day job.

The six-a-side match pitted the EU against the countries that want to join the bloc. The Austrian Chancellor and host, Wolfgang Schüssel, set up the match for a children's charity. But this being the EU, nothing could be that simple.

As this was an EU-Latin America summit, there was a spare body - the President of Peru Alejandro Toledo Manrique - who played for the EU. And there was an array of substitutes to ensure leaders did not play for more than 10 minutes at a time.

To Queen's "We are the Champions" and Abba's "The Winner Takes it All", the players emerged from the tunnel of the Budo Centre in Vienna. Finishing at 7-7, the two sides were level, and a penalty shoot-out was needed.

Though the candidate nations emerged victorious by 3-0, supporters of the EU can draw comfort from one thing. At least they won't have to watch a replay.