EU probes Spanish energy plans

Spanish plans to make it harder for foreign companies to invest in the energy sector are to be scrutinised by the European commission.

A spokesman for internal market commissioner Charlie McCreevy confirmed on Monday that he had sent a letter to Madrid seeking clarification of the new rules.

Spain, which is seeking to protect energy group Endesa from a possible takeover by Germany’s Eon, passed the new law on February 24.

New powers have been given to Spain’s national energy authority and of particular concerns are new procedures for takeover bids.

A commission spokesman said the legislation “could create barriers to the freedom of establishment and the free movement of capital”.

But he stressed that Brussels was not taking formal action against Spain at this time. “This is simply a letter asking for clarification within 10 working days, and nothing more at this time.”

The letter contains detailed questions to the Spanish authorities relating to the commission’s concerns about its compatibility with internal market rules.

Just last week the commission sent a letter to France demanding information about the government’s alleged role in blocking the takeover of energy group Suez by Enel of Italy.

Enel claims that Paris “invited” its potential partner, French utility group Veolia, to withdraw its support, allowing the government to oppose the deal as hostile.

Veolia’s chairman Henri Proglio has distanced himself from Enel’s comments, saying it was simply “a business opportunity which we decided not to pursue”.

Suez has since agreed to merge with the state-controlled energy group Gaz de France, thus protecting it from hostile bids.

Brussels is already examining France’s justification for a new law passed in December protecting companies in 11 “strategic” sectors, also thought to contravene internal market rules.

French Prime Minister Dominque de Villepin has pressed ahead with his programme of “economic patriotism”, despite the increasing likelihood of sanctions from Brussels.

And there is widespread support for the move, with a poll in Le Figaro showing that nearly 70 per cent of the French believe that companies should be protected from hostile takeovers by foreign players in order to protect local jobs.

One centre-left deputy, Arnaud Montebourg, has even put forward an amendment to EU takeover rules currently being discussed by the French parliament which would allow the government to intervene in any bid considered hostile.

But opposition to France’s increasingly protectionist stance is growing across Europe, with Portugal’s president, Anibal Cavaco Silva, warning that economic patriotism was “not a solution to the problems of Europe”.

Meanwhile, Belgium’s energy minister André Antoine has warned about the consequences of a lack of competition once the Suez/GdF is completed. The merged company will be the sole energy supplier in Belgium.

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