Link Securities | The European Commission (EC) is finalising the opening of infringement proceedings against Spain for the additional conditions imposed by the government on BBVA’s takeover bid for Banco Sabadell (SAB), as it considers that the government has overstepped its powers and that its actions are contrary to the free movement of capital. and will therefore take measures before the summer break that could eventually escalate to a complaint before the CJEU, according to a report in Expansión newspaper on Thursday.
The EC will act after assessing that these restrictions violate the free movement of capital, as set out in Articles 63 to 66 of the Treaty on the Functioning of the European Union (EU). According to EU sources familiar with the process, the intention is to open the procedure ‘before the summer break’ and they cannot conceive of a scenario in which this does not happen.
The Council of Ministers gave its authorisation for the operation on 24 June, but is preventing BBVA from merging the two banks for the next three years, with the possibility of extending this restriction for a further two years. This is a possibility provided for in the 2007 Competition Law, which the government believes gives it the power to go beyond the conditions imposed by the National Commission for Markets and Competition (CNMC) in order to protect the general interest.
However, the EC does not share this view. The Directorate-General for Financial Stability, Financial Services and Capital Markets Union (FISMA) considers that Spain may be stretching the concept of the general interest too far.
