Hit on the government’s argument line to make obstacles to the merger of the BBVA and Banco Sabadell. The European Commission has opened an infraction procedure against Spain for the laws on which the Executive was based to interfere with the OPA. The Community Executive considers that Spanish norms allow the government to overreach in the control of business operations or concentrations. In the case of the purchase of Sabadell by BBVA, in Brussels they consider that only the European Central Bank (ECB) and the National Competition Authorities (CNMC) should have pronounced and questions that the decision would rise to the Council of Ministers, which put extra conditions.
The European Commission has been analyzing the legislation surrounding this operation since May 2024, when two days after the announcement of the acquisition of Banco Sabadell by BBVA received a complaint from a citizen who put on alert to community technicians about the possibility that several Spanish norms could hinder that operation. In August of that same year, the community government began a consultation process with Madrid (called EU Pilot) on the matter. But the process has been unsuccessful since the Executive finally use these regulations to put additional conditions to which the CNMC had established against the Brussels criteria.
Brussels believes that the Ministry of Economy should not have had the ability to raise the decision to the Council of Ministers and that Spanish norms grant, ultimately, to the Government an ability to prohibit a business concentration for reasons other than the general interest. That means for the community executive a violation of the free movement of capital and establishment colliding with European regulations – which prevail over national law – as the regulation of the unique supervision mechanism, the mechanism of capital requirements and several articles of the EU operation treaty.
Among the regulations that the European Commission questions are the Law on Supervision of Credit Entities of 2014 and Royal Decree 84/2015 on which the Government was based to condition the OPA. It also considers that the Government made an erroneous interpretation of the Law of Defense of the 2007 Competition by raising this operation to the Council of Ministers. Specifically, Brussels believes that these norms give the Government the ability to impose conditions on the operations that go beyond the general interest (due to criteria for national defense and safety, protection of public security or health, free circulation of goods and services within the national territory, protection of the environment, etc.) by overreaching the requirements that barriers to the free movement of capital are provided and exceptional. Thus, the capacity of the Ministry of Economy to intervene (even giving veto capacity) in business concentrations is excessive.
“The Commission considers that certain provisions of Spanish banking and Spanish legislation on compete capital movements, ”says the community executive in a statement.
In the European Commission they have always harmed the reluctance that the Government of Pedro Sánchez has demonstrated with the BBVA OPA on Sabadell. To a large extent because one of the EU problems is the low bank concentration, that is, the small size of the entities against the competitors of other countries. “The consolidations in the banking sector benefit the EU economy as a whole and are essential for the achievement of the banking union. These mergers also guarantee that capital is assigned efficiently throughout the EU and that citizens and companies have access to financial products at competitive prices, key objective of the union of savings and investment,” says the European Commission’s note.
Brussels has sent this Thursday a letter of location to Spain in which it gives the government two months to respond and “correct deficiencies.” That is the first step of the opening of the infraction procedure that advanced expansion. Then the European Commission will analyze the answer and, if it is satisfactory, the file would close (it does not seem that it will be the case since the contacts have extended without success for almost a year), and if it is not to claim to Spain measures to correct the infractions. In case of progress in the change of the legislation, the European Commission could send the case to the EU Court of Justice, which could end up imposing a fine on Spain.
The merger process of BBVA and Banco Sabadell has made the alarms jump in Brussels on the violation of community law from laws that were already in force and had not caught the attention of the European Commission in a decade. The claim of Brussels is that the government undertakes the changes of that legislation, although it does not enter the bank operation as such. However, the infringement procedure and its conclusions can serve BBVA in their legal battle against the government’s obstacles.
Source: www.eldiario.es
