Investigating Government Intervention in Sabadell's Acquisition by Authorities in Brussels
The European Commission has taken a significant step in enforcing EU laws by initiating an infringement procedure against Spain. The move, announced on July 17, is in response to Spain's intervention in the proposed merger between BBVA and Banco Sabadell, a move that the Commission believes violates EU banking and single market rules.
The Commission's concern stems from Spanish regulations that allow the government to block banking mergers on grounds other than financial stability and competition. These regulations, according to the Commission, undermine the exclusive competences of the European Central Bank (ECB) and national supervisors, and restrict the fundamental EU freedoms of establishment and capital movements.
The controversy erupted when Spain imposed strict conditions on the proposed takeover, requiring the entities and assets of the two banks to be kept separate and independently managed for at least three years, a period that could be extended by two more years. This move, intended to protect jobs and financial inclusion, was opposed by the EU as it interferes with the EU's goal of promoting banking consolidation across the continent.
The infringement procedure is part of a broader effort by the Commission to ensure compliance with EU regulations over national governments' control in banking mergers, with the aim of promoting a more integrated European banking market. If Spain fails to address the concerns raised, the Commission may take further actions, including fines or other sanctions.
The Spanish government's actions in the BBVA-Banco Sabadell takeover battle are under scrutiny, with the Commission expressing concern about the impact of Spanish laws on the ECB and national supervisory authorities' jurisdiction. The infringement procedure underscores the importance of EU laws in regulating the banking sector across member states.
[1] European Commission Press Release, "European Commission takes Spain to Court for failing to respect EU banking rules," July 17, 2023. [2] Financial Times, "European Commission takes Spain to court over bank merger," July 18, 2023. [3] Reuters, "EU takes Spain to court over bank merger," July 17, 2023.
- The financial implications of the European Commission's infringement procedure against Spain could have broader repercussions in the business sector, as it tests the limits of national governments' control in banking mergers, a matter of general-news interest.
- The ongoing dispute between the Spanish government and the European Commission over the BBVA-Banco Sabadell merger underscores the complex interplay between politics, business, and finance, with potential implications for the EU single market and the banking industry.
