Brussels acts against Madrid over 'protectionism'

3rd May 2006, Comments 0 comments

3 May 2006, BRUSSELS — The European Commission has formally accused Spain of breaking European laws over the takeover bid by a German energy company for the Spanish electricity utility Endesa.

3 May 2006

BRUSSELS — The European Commission has formally accused Spain of breaking European laws over the takeover bid by a German energy company for the Spanish electricity utility Endesa.

The EC approved, without any debate, proceedings against Madrid for contravening laws guaranteeing the free movement of capital within the community.

Spain was criticised for being protectionist in the way it reinforced the powers of its own energy watchdog, the National Energy Commission (CNE) in a bid to ward off a hostile takeover bid by the German company E.ON.

Spain's Socialist government had openly declared its support for a rival bid by the Spanish company Gas Natural for Endesa.

The EC is to send a summons asking for explanations over the affair.

If these answers are not satisfactory, then they will send Madrid a judgement, saying they consider the Spanish actions illegal and demand they be reformed.

If nothing is done, Spain can then be summons before the European Court of Justice.

In the face of the threat of Endesa falling into foreign hands, Spain reinforced the powers of the CNE with regard to foreign bids for Spanish companies.

But this was seen by the EC as protectionist.

The EC competition commissioner Charlie McCreevy earlier warned Spain it faced legal action over the move.

The EC last month approved the takeover of Endesa by E.ON to reinforce competition rules within the European market.

But the Spanish industry minister, José Montilla, said on Tuesday "many countries faced dozens of proceedings", indicating Madrid was not too concerned about the EC move.

[Copyright EFE with Expatica]

Subject: Spanish news 

 

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