Chapter 6: The reform of the utilities sector in Spain
Pablo Arocena 1. INTRODUCTION As in many other countries, the utilities sector in Spain is involved in an ongoing process of fundamental reform, largely driven by the European Union’s initiatives towards market liberalization. In a relatively short period of time, the historical monopoly of telecommunications has been dismantled and control of the industry has passed to private hands. In the energy sector, some important state-owned companies have been privatized and the market progressively liberalized at an even faster pace than that proposed by the European directives. Parallel to regulatory reforms, the 1990s witnessed a large number of mergers and acquisitions that led to massive horizontal and vertical concentration. On the other hand, the interrelation between telecommunications, oil, gas and electricity companies resulted in the creation of big industrial and ﬁnancial groups, whose individual boundaries and interests are often diﬃcult to recognize. Also at the beginning of the 1990s, the Spanish utilities initiated an international expansion through an aggressive policy of investments and acquisitions in the privatization programmes carried out in most Latin American countries. This corporate growth shaped the Spanish utilities as a group of prominent players both in the European and the Latin American arenas, while utility prices in Spain were among the highest in Europe. The objective of this study is twofold. First, we describe the reforms that have taken place in the utilities sectors in Spain and assess the role of politics in shaping the process of such reforms. Second, we assess the distributional impact of...
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