Spanish poll to delay talks on EU firms

Date: 03/02/2000

By Simon Coss

THE Portuguese presidency has given up any hope of breaking the deadlock over plans to let firms set up as European companies until after March's general election in Spain.

Officials say they will not attempt to restart talks on the stalled initiative, which is being blocked by Madrid, until the 12 March poll is out of the way.

The move reflects a recognition that there is no chance of the Spanish government giving ground on the company statute plan in the run-up to the nationwide ballot despite the clamour from industry for swift agreement on the proposal, which would allow multinational firms to cut administrative costs by setting up as EU-wide companies instead of 15 national firms, as they have to do now.

The delay has sparked fears that the momentum generated by the Finnish presidency in talks on the company statute plan before Christmas could be lost.

In December, Helsinki believed it had found a formula to break the impasse after years of negotiations, and took heart from signs that Madrid might be prepared to accept its offer of an opt-out from the initiative for a limited period. But the Finns' hopes were dashed at the last minute. "The Spanish finally refused everything," said one EU diplomat.

The Portuguese have made it clear that when they do launch a fresh attempt to get a deal, they will not change the current draft text again just to win over the Spanish. "It was hard enough to get the other 14 member states to accept a deal everyone could agree to," said one diplomat.

Spain is unhappy with the proposed statute because it would give trade unions a vote on company boards. Madrid's ongoing dispute with the UK over the status of Gibraltar is also a major stumbling block, as Spain refuses to accept the idea that the Rock's authorities should be responsible for transposing the EU law into local legislation.

The Portuguese Presidency has given up any hope of breaking the deadlock over plans to let firms set up as European companies until after the March 2000 general election in Spain.