The European Court of Justice ruled last week that Spain broke EU law by trying to obstruct a German takeover of Spanish energy firm Endesa. The court said Spain broke competition rules by insisting mergers in its energy sector be pre-approved. E.On made a 42.5bn-euro bid in February 2006 which was approved by the European Commission. But Spain’s energy regulator placed 19 conditions on E.On’s 2006 offer, which was withdrawn in April 2007. As well as the E.On case, Spain also applied the system of “prior authorisation” to the bid for Endesa by Italian energy company Enel and Spanish construction group Acciona. The actions were considered to be part of a wider attempt by Spain to prevent foreign utilities from taking stakes in domestic peers. The European Commission took Spain to the court, accusing it of restricting the free movement of capital.

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