Spain defends 'protective measures' to shield energy companies
By
Dominique Orin
AFP
MADRID
Petroleumworld.com
03 08 06
The Spanish government has hit back at the European Commission
in defence of recent legislation perceived as an attempt to shield
Spanish energy group Endesa from a takeover by German rival E.ON.
The EU Commission has given the Spanish government 10 days to
explain a government decree that has strengthened the powers of
the Spanish energy commission amid suspicions that the legislation
might contravene EU laws.
Spanish Industry Minister Jose Montilla said the majority of countries
in the European Union had "protective measures" to shield
their biggest energy companies and that the Spanish measures were
to cover a "legislative vacuum", Spanish papers reported.
The government had a responsibility to guarantee supplies of energy
and defend national interests in this area, a role that has been
given to the Spanish energy regulator "in line with other
European countries", he said.
"We are not talking about yoghurt factories here, but about
guaranteeing citizens a supply of energy in the medium to long-term
at a reasonable price."
The reference to yoghurt factories was possibly an attempt to
contrast Spanish policy with efforts in France to thwart foreign
takeovers of French companies, where a rumoured bid last year
for dairy products group Danone from US-based Pepsico caused outrage
in political circles.
The European Commission is concerned that a decree by the Spanish
government on February 24 could create obstacles for other European
companies wanting to operate in the Spanish market.
The decree gives Spanish energy regulator CNE the right to vet
any bid to buy 10 percent or more of a Spanish energy company
in order to protect the "general interest" of the sector
against "significant risks".
Montilla stressed that the decree was not an attempt to legislate
against the proposed takeover by E.ON of Endesa, even though the
decree was approved four days after the bid by E.ON was unveiled.
E.ON has offered 29.1 billion euros (34.6 billion dollar) in cash
to buy Endesa.
The bid trumped a rival cash-and-shares offer for Endesa from
Spanish gas group Gas Natural, which had been supported by the
Spanish government.
Montilla also argued that energy policy in the EU was not set
"entirely" by the Brussels-based EU commission, but
that national heads of state, meeting as a council, had the final
say on rules governing the single European energy market.
"It will be the council that will decide to impose community
rules" leading to "the creation of real common energy
market", Montilla said.
The Spanish government has also tried to justify its decree by
pointing to similar legislation in Germany that benefits E.ON
and prevents a foreign takeover of the company.
Madrid has argued that the German government has the right to
vet any takeover of E.ON's gas business, Ruhrgas, which it bought
in 2002.
At the time of the takeover, the approval of the German Economy
Minstry was necessary to complete the deal.
AFP
03 07 06
Copyright
© 2006 AFP. All rights reserved
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