Spain Min: Banco de Venezuela Nationalization Not Justified

Spanish Finance Minister Pedro Solbes said Monday he doesn't think the Venezuelan government's decision to nationalize Banco de Venezuela is justified.

The bank is a unit of Spain's Banco Santander SA (STD).

"We've seen a lot of changes of position in the last few months," Solbes said at a meeting with journalists and Spanish business leaders. "But, in principle, the reasons given for the nationalization don't seem to me justified."

The Venezuelan government first revealed its intention to buy Banco de Venezuela from Santander last July, saying it wanted to boost lending to the Venezuelan economy.

In recent months, in the absence of news on the deal and as Venezuela suffers from plummeting oil revenue, speculation had spread that the government could backtrack on its plan to nationalize the Santander unit.

Venezuelan President Hugo Chavez last week moved to dispel this speculation by saying his government would soon set a deadline to complete the transaction.

-By Jonathan House, Dow Jones Newswires; [phone]; [e-mail]