Business Brief

E.ON tenterhooks

Spain's energy regulator, the Comisi-n Nacional de Energia, has until Saturday (29 July) to rule on Germany energy company E.ON's 29.1 billion euro bid for Spanish group Endesa. The regulator's administrative council meets today (27 July) to decide on the conditions of the deal, which may include the imposed sale of Eon's Ruhrgas unit, as well as the sale of Endesa's stakes in seven nuclear power plants. The European Commission will keep a watchful eye on attempts to gut the deal.

Dividend law warnings

The Commission asked Belgium, Spain, Italy, Luxembourg, the Netherlands and Portugal on Tuesday (25 July) to amend their tax laws on dividend payments to foreign companies. In these countries, taxation on dividends to foreign companies is heavier than that imposed on domestic companies. If satisfactory remedies are not suggested within two months, the Commission could take legal action at the European Court of Justice.

Alcatel deal cleared

The Commission has cleared a proposed merger between French telecoms company Alcatel and US firm Lucent Technologies. Both companies supply telecoms equipment and related services to operators of communications networks. The Commission concluded that, despite both companies' considerable market shares, in particular in the supply of optical networking equipment and broadband access, the merger would not affect competition in the wider market.

Reduced rate VAT

The Commission proposed to the Council of Ministers on Tuesday that 17 member states be allowed to apply reduced rates of VAT on labour-intensive services such as hairdressing and window-cleaning until December 2010.

Sardinian air probe

The Commission has announced the opening of an investigation into rules imposed by Italy on air routes between three Sardinian airports and airports on the Italian mainland.

Legal action launched

The Commission has launched infringement proceedings against Germany, Greece, Ireland and Italy. Germany was targeted over its taxation of services provided by the executors of wills. Greece has failed to transpose correctly EU legislation on electronic invoicing. Ireland must amend legislation on the tax treatment of public bodies. Italy needs to apply correctly EU VAT rules on the acquisition of goods and services related to motor vehicles.

The integration of the EU financial services companies into global markets carries potential risks of 'financial contagion', the European Commission will warn on Friday (28 July) in its third annual report on the future development of the sector.

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