Spain is being referred to the European Court of Justice by the European Commission over restrictions on the free movement of capital.
Certain provisions of Spanish legislation limit the voting rights of investments by companies in the energy sector, provisions which the Commission considers constitute unjustified restrictions.
The Spanish law in question provides that in cases of direct or indirect acquisition or control by state companies of more than 3% of the equity or the voting rights in Spanish energy companies, voting rights attached to shares above that limit are subject to the prior authorisation of Spain’s Council of Ministers.
Following Commission intervention, Spain amended the law in 2003. However, the Commission considered that the changes made were not sufficient because they gave the authorities wide discretionary powers when deciding on whether or not to allow the exercise of voting rights in Spanish energy companies by public entities. Consequently, in July 2004 the Commission sent Spain a letter of formal notice and as it has not as yet received any reply from the Spanish government, it has moced to the next stage of the infringement procedure.