Europe's antitrust chief singled out Spain on Saturday for failing to play by EU rules in thwarting energy company E.ON's bid for rival Endesa, and promised to keep up the pressure on Madrid.
The European Commission in April cleared the German energy company's 27 billion euro ($34.6 billion) bid for Spain's Endesa. But the Spanish energy regulator imposed 19 conditions on the deal in July, including the sale of a nuclear power station and a number of coal plants and the divestiture of a supply business on Spanish islands.
"Our preliminary conclusion is that the compatibility of most of these conditions with EC law is doubtful," Competition Commissioner Neelie Kroes said in remarks prepared for delivery to a meeting of business and political leaders.
She said the Commission, the executive arm of the European Union, would "remain vigilant in this case as in others, and we will continue to take a firm stance and speak out clearly in any case where member states do not play by the rules." She said the actions taken by Spain were among several isolated incidents, not part of a pattern. "If they prove anything, it is that the single market is finally starting to work in areas we would not have imagined 20 or even 10 years ago," she said.
The Commission has also taken action or is examining problems in Italy, Poland and France that have been dubbed "economic nationalism" - attempts to block cross-border movement of capital which is provided for by EU treaties.
On Friday, Spanish Industry Minister Joan Clos expressed optimism that the Endesa situation was "in the final phases, close to a definitive agreement. I hope it is acceptable with the European Union."