Brussels threatens Madrid with action over regulatory mergers

Brussels has come down hard on Madrid over the Rajoy government's proposed law to merge key regulatory bodies, threatening to open a European Commission (EC) probe into Spain for violating fair trade policies.

In a stern letter to Industry Minister José Manuel Soria, EC Vice President Neelie Kroes ordered the government to make amendments to the law that will merge the agencies that supervise the energy, trade and telecommunications sectors under a new body called the National Commission for Markets and Trade.

"The proposed legislation infringes on the wording and spirit of the European law on telecommunications," said Kroes, who has confirmed the February 11 letter sent by her. "The Commission has no other choice but to present a case for violations if the legislation is adopted without substantial changes related to the independence and functions of the regulators."

For the past six months, Brussels has been warning the Popular Party (PP) government that the mergers could have "serious effects on consumers."

The bill, drafted by Economy Minister Luis de Guindos, proposes to put several regulatory bodies, including others that supervise the post office, airports, railroads and radio and television industries, under the same agency. The government has said it was making this change in an effort to save money. But Brussels says that Madrid has not stated the amount the merger would save.