Brussels launches legal action against Spain over bank merger powers

MADRID – The European Commission has launched an infringement procedure against Spain for granting the government sweeping powers to block bank mergers, a move Brussels says violates EU law.

The move follows the government of Prime Minister Pedro Sánchez's decision to halt a proposed takeover of Banco Sabadell by BBVA and Banco Sabadell for three years.

With €719.45 billion in assets, BBVA is Spain’s second-largest bank while Banco Sabadell ranks fourth, with €244.42 billion.

In a formal letter sent to Madrid, the Commission said the legal framework used to block the proposed merger breaches core EU rules on the freedom of establishment and movement of capital.

The Spanish authorities now have two months to respond. If the reply is deemed unsatisfactory, the Commission may escalate the case by issuing a reasoned opinion, Euractiv’s partner Servimedia reported.

The EU executive also criticised Sánchez government for overruling the Spanish Competition Authority (CNMC), which had conditionally approved the bid.

EU sources cited by Spanish media say a 2014 banking law and its 2015 implementing decree give the economy ministry excessive discretionary power over banking operations – an area that falls under the exclusive competence of the European Central Bank.

According to the Commission, this undermines EU financial regulation and legal certainty for cross-border banking deals.

(cs, de)