The European Commission has started to carry out an exhaustive analysis of the power industry of all its member states in order to correct for anomalies and create the most unified energy market possible.
The Spanish government has already been asked to do away with the gap between costs of production and revenues, which up until now has created a 30-billion euro tariff deficit. The EU's plan warrants backing, because all countries should be playing on a level playing field. In addition to establishing more order in the European arena, it is pressuring the Spanish government to apply the Power Sector Law, which calls for eliminating the tariff deficit, which is an historic problem causing higher tariff rates in Spain and in desperate need of a solution. This was also one of the Council of Europe's recommendations for Spain within the reforms it plans to put into effect from 2012-2013 and one of the conditions of the Memorandum of Understanding that needed to be followed for Spain to receive a financial sector bailout.
In exchange for complying with this requirement and others outlined in the plan, Spanish banks will receive aid from European monetary funds. When the Memorandum was signed, it was said that this money, which still hasn't arrived, would not increase Spain's deficit or national debt. Still, it looks like the EU has changed its plans due to pressures from Germany, Finland and Holland. Now it is more likely that the Spanish government will receive funds from the European Stability Mechanism instead of the banks.
It's hard to see why the aid comes with such conditions and the power companies are now under audit when one of the sections of the plan changes the conditions that were originally agreed to. The rules of the game have changed.
