Spain will come under renewed pressure from the EU on Tuesday to lift the conditions Madrid imposed on the merger of energy groups Eon and Endesa.
The case involving a cross-border takeover, of a flagship Spanish company by a German rival, fuelled a storm over economic protectionism and boosted calls for an EU energy policy.
The Spanish government imposed 19 conditions on Eon before allowing it to buy Endesa, including the sale of most of German group’s Spanish electricity business.
European competition commissioner Neelie Kroes is expected to announce that Spain has acted illegally in imposing the national conditions, which breach EU internal market rules.
Kroes has rejected Spain’s claims that the conditions are necessary to ensure the security of supply amid fears that Eon would favour the German market in times of shortage.
Spain favoured a rival bid from Gas Natural, another Spanish firm, which it considered would be a safer partner for Endesa, but found itself facing accusations of protectionism as a result.
Meanwhile, internal market chief Charlie McCreevy is also expected to make a second formal warning to Madrid over a law that gave the country’s energy regulator new powers to block international mergers.
The new rules were hastily pushed through in February following Eon’s bid for Endesa, and effectively legitimised Madrid’s opposition to the deal.
But McCreevy claims the new rules, which impose different criteria on cross-border and national mergers in the energy sector, breach EU rules on the free movement of capital.
Madrid is not expected to contest either of the commission’s rulings, however.
FT Europe cites Spain’s new industry minister, Joan Clos, as saying that it would be “unintelligent, to put it mildly, to fail to address the commission’s comments”.
Have your say...
Please enter your comments below.