Short-fused

12 October 2005 By Fiona Maharg-Bravo

It s hard to believe Italy is really interested in free trade between Spain and Portugal, as it claims in its petition to the EU. Italy’s real agenda seems to be to pry open Spain’s market for its own national champion. That may not be altruistic. But it’s still valid.

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Italy's antitrust authority has asked the European Commission to review the planned E22bn Gas Natural bid for Endesa in Spain. It argued in a statement that the deal could weigh on trade between member states Spain and Portugal, in the power and gas markets, and could bring a risk to competition in these countries. The statement also said the deal has a cross border element, in that some of the Endesa assets being sold by Gas Natural to Iberdrola as part of the bid are European.

The Italian request follows a similar move by the Portuguese antitrust authorities concerned about the deal's impact on its gas and electricity markets. Spain and Portugal are currently negotiating the creation of a single Iberian power market.

Meanwhile, Italian energy group Enel has said it would be interested in bidding for some of the Endesa assets earmarked for sale to Iberdola. Portugal's Energias de Portugal and Spain's Union Fenosa have also expressed interest in the assets.

The EU has yet to decide whether it will review the deal. A decision is expected this week, according to reports.

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