Friday, July 26, 2013
Spain's regulatory merger
Although Spain needs to improve coordination among its regulatory agencies, the creation of a National Commission on Markets and Competition would seem to be the opposite of what the European Union had in mind. The controversial move merges eight agencies and commissions responsible for competition, telecom, energy, mail, railways, airports, gambling and audiovisual media. I argue in a working paper of IESE that neither the purported savings nor the need for greater coordination justifies such total integration. What's more, government projections that this will save millions derive more from changes to the merger as originally planned, rather than from efficiencies gained through the merger itself. The European Commission has stated all along that it was concerned about the loss of independence that would result from an all-encompassing regulatory body. The most serious warning came in February 2013 from Neelie Kroes, vice president of the Commission, who threatened sanctions unless Spain made substantial changes to its original plan. The Spanish government responded by changing some of the most questionable aspects. The whole summary of the working paper and a link to it can be accessed here.