Under pressure over energy plan, Mexico president suggests pausing relations with Spain

By Raul Cortes

MEXICO CITY (Reuters) - Mexican President Andres Manuel Lopez Obrador on Wednesday said diplomatic relations with Spain should pause, turning on Mexico's former colonial power as he sought to deflect criticism of his plan to strengthen state control of the power market.

Addressing concerns that his bill to give precedence to the state power utility, the Comision Federal de Electricidad (CFE), over private firms was discouraging investment in renewable energy, Lopez Obrador said his proposal aimed to end abuses in the industry that he argues had benefited a select few.

Lopez Obrador says past, corrupt Mexican governments rigged the energy market in favor of private interests, and has repeatedly argued that certain Spanish companies were among those who benefited most from that policy.

"There was a plot at the top, an economic, political promiscuity at top of the governments of Mexico and Spain, but for like three administrations running, and Mexico had the worst of it, they plundered us. So the best thing is to have a break, a breather (in relations)," Lopez Obrador told reporters.

Spanish Foreign Minister Jose Manuel Albares expressed surprise at the comments, saying that bilateral ties were of strategic importance beyond any "sudden" declarations.

"I'd like to make clear that Spain's government has done nothing that could justify any declaration of this kind," he said during a visit to the French city of Lyon. "What's clear from business ties between our countries is that far from pausing, investment flows have only been rising for years."

Lopez Obrador later emphatically underlined that he was not proposing breaking diplomatic ties with Spain, which he has frequently criticized for its colonial legacy in Mexico, just as he has repeatedly pointed the finger at Spanish firms.

The Mexican president took aim at Spanish companies during a regular news conference ahead of a meeting with U.S. Climate Envoy John Kerry, whose visit to Mexico follows criticism by the U.S. government and businesses of his energy plan.

A leftist resource nationalist, Lopez Obrador highlighted power company Iberdrola and oil firm Repsol as Spanish companies that benefited from past Mexican governments.

Separately, Kerry said his government wanted to work with Mexico to promote renewable energy, following up on Washington's concerns over Lopez Obrador's bill.

(Reporting by Raul Cortes Fernandez and Diego Ore; Additional reporting by Belen Carreno in Madrid; Valentine Hilaire; Editing by Dave Graham and Sandra Maler)