EU to contest Spanish energy law

The European commission is preparing to take legal action against Spain over new rules designed to block foreign takeovers in the energy sector.

Internal market chief Charlie McCreevy told reporters in Alicante that he was not satisfied with Spain’s justification for the new rules, and that he hope to see legal proceedings start by the middle of April.

The Spanish government had argued that it was in the public interest to keep energy suppliers in national hands, a claim dismissed as “unsatisfactory” by the commissioner.

Madrid has rushed through new legislation giving new powers to the country’s national energy commission, allowing it to block cross-border takeovers.

The move was prompted by the announcement of a proposed bid for Spanish energy group Endesa by Germany’s Eon group.

The Spanish government favours the proposed tie-up between Gas Natural and Endesa, which would create a giant “national champion” in the energy sector.

Competition commissioner Neelie Kroes has also warned Spain not to overstep its authority, reminding the government of José Luis Rodriguez Zapatero that Brussels alone has the power to approve or veto EU takeovers.

Similar moves in France, where the Paris authorities brokered a rapid deal between the Suez and Gaz de France energy groups to protect against a bid from Italy’s Enel, are likely to be met with similar action.

McCreevy is expected to call for legal action if he is not satisfied with the response of the French authorities to his concerns about the free movement of capital.

Press reports claim that Enel could be allowed to bid for parts of the merged Suez/GdF group in order to alleviate the commission’s concerns.

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