Venezuelan President Hugo Chavez says European banks in Venezuela may have to go, a response to a new, more stringent immigration law passed by the European Union.

Chavez says he could expel banks and other businesses, from European countries, that apply controversial rules to deport illegal immigrants.

serious threat

The socialist president said during an Independence Day address Saturday that the threat is "serious".

The EU Parliament passed new guidelines in June to standardise the deportation process.

They contain contentious measures such as long detention periods.

Chavez has threatened to cut off oil and block investments from countries that apply the rules, which he said show "signs of fascism".