Repsol is barred from increasing its network of service stations in Spain until under liberalisation measures approved in Fish, for example, are the sixth largest Spanish export to Portugal, even though the country is also a fishing nation. Several Spanish food companies have strong positions in Portugal including Pescanova and Panrico. The Portuguese government blocked the deal, ostensibly because it said insurance sector regulations had been breached, even though the European Commission had given its blessing to the sale.
Through its ownership of Totta, Santander has a representative office in Johannesburg. Santander Totta is the fourth-largest banking group in Portugal by assets and the third ranked private sector banking group see Table Overall, Santander is the largest bank in the Iberian Peninsula. Its total assets it is a major player in Latin America surpass the combined assets of all the banks in Portuguese hands. The same goes for Banco Bilbao Vizcaya Argentaria. He said BBVA would grow organically in the country, but this has not quelled the speculation that it would like to buy another bank.
Such a move would be fiercely resisted by the Portuguese authorities. BNC has 4. Sabadell owns 3. The regional government of Catalonia admitted before the sale that it preferred Banco Atlantico to be acquired by a Catalan or Spanish bidder rather than a foreign one.
The combined market share of the three banks is small. The two groups pooled their interests in Brazil to create Vivo, the commercial name of Brasilcel, a joint venture and the largest mobile telephone operator not only in Brazil but also in the southern hemisphere. Vivo has more than This acquisition added The Brazilian cellular market has substantial growth potential. The much delayed single electricity market for Spain and Portugal, agreed in November with an original start-up date of January , will not begin until June Spain and Portugal have limited natural energy resources and need a competitive and well supplied power market to realise their full economic potential.
Both markets are reasonably similar as regards generation. The Spanish market is more diversified as it has nuclear energy see Table The degree of competition, however, varies considerably. The Spanish generation market is liberalised, with six significant producers, four of which are large national companies and two are controlled by European utilities.
More companies are joining the market. Portuguese consumers stand to benefit more than Spanish ones from competition as their prices would fall to a greater extent. Electricity and Gas Distribution — Market Shares, Spain — Gas Portugal — Gas. The original idea of this law was to prevent foreign companies from controlling privatised companies. Even if there was a total and immediate liberalisation of the Portuguese market tomorrow, there would still be other issues to resolve to make the single market an effective reality.
The main one is the limited capacity of the interconnections between the two countries. The construction of the second Cartelle-Lindoso interconnector is a step in the right direction but this increase in capacity is not enough.
Convergence of Iberian gas markets is also under study. The completion of the Maghreb-Europe pipeline in , which connected the Iberian Peninsula to Algerian natural gas sources, has enabled Spain and Portugal to boost gas consumption. The five distributors in Spain give the regulatory body a frame of reference to indirectly encourage efficiency by comparison.
Iberdrola controls two small gas distribution companies in Portugal. As distribution is regulated, it could be argued that such domination is not a problem. However, antitrust authorities believe that the internal barriers to new entrants created by companies undertaking both electricity and gas distribution should not be underestimated.
Full control of the distribution in a country as well as ownership of other activities create inefficiencies and encourage cross-subsidies. Territories where a participant can simultaneously distribute electricity and gas need to be reduced to the minimum in both countries. The agreement signed in February between the Portuguese government and Iberdrola, which allowed the latter to gain control of two small gas distribution companies, is an important step in the right direction.
Electricity and gas supply are at different stages of liberalisation. In Spain, since 1 January , all customers are able to freely choose their provider, in gas as well as electricity.
As a result, 23 million electricity customers and 5 million gas customers have full freedom of choice. In Portugal, since January , all mid-voltage 1kV customers are eligible to switch suppliers, which represented in around 3, GWh.
As of 1 July all customers were able to switch suppliers. But there is no liberalisation in gas supply in Portugal. Service to residential and commercial customers is done through several distribution companies, mostly owned by Gas de Portugal which EDP and the Italian energy group Eni sought to acquire in August. The European Commission sent a formal charge sheet in October raising concerns over the deal.
The Commission is concerned that the deal would remove a natural competitor to EDP in the electricity generation market and raise the entry barriers to other groups seeking to break into the Portuguese market. The deal would give the combined entity a huge customer base and create the only vertically integrated gas and electricity provider in the Portuguese market.
Unless the companies can satisfy the Commission's objections, the deal is likely to be either prohibited or require concessions like divestments. Spanish players in MIBEL support the acquisition with certain conditions such as opening the electricity market to new generators. Gas supply to major users is provided by Transgas with the possibility of negotiating the tariff if yearly consumption exceeds 68GWh.
Portugal needs to accelerate the liberalisation of its electricity market. The European Commission also needs to clarify the issue of a mechanism that enables EDP to compensate for the breaking of existing long-term contracts but without giving it an unfair advantage.
Such a mechanism is not needed in Spain as the market is already fully liberalised. The degree of integration of the Spanish and Portuguese economies is already high and is bound to increase, particularly in an enlarged EU of 25 countries which will continue to add new members Bulgaria and Rumania in and possibly Turkey in The entry of former communist nations with much lower labour costs is eroding one of the previous competitive advantages of the two countries for multinationals, and Spanish and Portuguese companies are also beginning to relocate.
Economically, at least, it would make sense for Spanish and Portuguese companies to forge closer links, either through outright mergers or more indirectly through crossed-shareholding agreements. Spain and Portugal are ripe, for example, for a cross-border merger of banks.
Politically, however, it is another matter. The Portuguese company partly, majority or fully owned by the Spanish company is in brackets along with the sector to which it belongs. The Spanish company partly, majority or fully owned by the Portuguese company is in brackets along with the sector to which it belongs.
Syrett, S. The authors measure the business cycles of Spain and Portugal with employment figures for the period. One could also measure it with GDP. This gives a benchmark for comparison. One would expect the Spain-Portugal correlation to be lower than the regional correlations within each country.
The size of that gap is the so-called border effect. Error: Javascript is disabled in this browser. This page requires Javascript. Modify your browser's settings to allow Javascript to execute. See your browser's documentation for specific instructions.
Download PDF to read the full paper. Map 1. High Speed Train Connections between Spain and Portugal On the international front, Spain and Portugal, once former rivals in Latin America Brazil, the most populous country, was under Portuguese rule for three centuries , work together in the Iberoamerican Community of Nations, founded in , which holds annual summit meetings of heads of state and government.
Converging economies Spain and Portugal followed similar political and economic paths during the 20 th century: Portugal deposed the monarchy in and declared a Republic Spain followed the Republican route in , which was cut short by its civil war ; both countries had long dictatorships for Portugal and for Spain ; both countries liberalised their heavily protected economies to varying degrees Spain began in the s and Portugal not really until the s and both joined the EU together and were founder members in of European Monetary Union the euro.
Table 2. Any attempt to unite Portugal with Spain would run into considerable opposition. Portuguese commentators already complain loudly whenever major Spanish banks and companies buy up Portuguese counterparts. The two countries also row over water, with Portugal complaining that too much is taken out of shared major rivers such as the Tagus and the Douro by the Spaniards.
A poll carried out three years ago found the Portuguese considered the second most important date in their history to be the day in when they regained independence from Spain. Only the Carnation Revolution, ending a year rightwing dictatorship, beat it. Saramago is not the only so-called "iberista" in Portugal, however. The small civil ceremony was reportedly carried out because they had failed to register an earlier wedding in Lisbon.
Portugal and Spain will become one, says Nobel author.
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