The European Commission on Thursday gave Spain one month to scrap conditions limiting a foreign takeover of its largest utility, Endesa SA, according to AP. The action was a last warning to Madrid that it must comply with a European Union order issued in December or face a lawsuit at the EU's court of justice. The Luxembourg-based court could impose hefty fines on the Spanish government if it is found to have violated EU competition rules. «If there is no satisfactory reply within one month the Commission may decide to refer Spain» to court, the EU executive said in a statement. An EU investigation last year found that Spain's energy commission, CNE, violated the rights of Italian utility Enel SpA and Acciona SA to invest, set up a business and move goods anywhere in the 27-nation European Union. The investigation called the CNE practices protectionist. Spain is unlikely to win a court case; the EU court ruled in March that Spanish regulators had no right to shield Endesa from an earlier takeover bid launched by Germany's E.ON AG in 2006. The Spanish government had favored a Spanish suitor for Endesa, even though management opted for the E.ON offer. The government then granted powers to the CNE, which placed a string of tough conditions on the bid. That ruling however, came too late for E.ON, which abandoned its bid for Endesa after strong resistance from Madrid. Endesa meanwhile became a target for two Italian energy companies _ Acciona SA and Enel SpA _ which now face the same objections from Spain.
