The Body submits BBVA's takeover bid to the Council of Ministers with a view to amending the Competition Act.

Carlos Cuerpo, Minister of Economy, has used the last day of the deadline to submit BBVA 's takeover bid for Banco Sabadell to the Council of Ministers . The Government now has 30 calendar days to decide how it will intervene in the transaction and thus amend the resolution of the National Markets and Competition Commission (CNMC) .

The minister justifies his decision "for reasons of public interest" and points to several criteria that could be used to torpedo the operation. Specifically, the Ministry of Economy cites "the potential impact of the operation on ensuring adequate maintenance of sectoral regulatory objectives, worker protection, territorial cohesion, the promotion of research and technological development, and social policy objectives" as arguments for bringing the case. Furthermore, the ministry reveals that five economic ministries have challenged this decision.

At the end of April, the CNMC approved the transaction with commitments agreed upon with the Basque bank, such as maintaining SME lending and commercial conditions for a maximum of five years. These commitments were acceptable to BBVA after a lengthy analysis lasting approximately a year, after which the so-called phase three process was opened for the government.

The Executive now has the takeover bid in its hands. Carlos Cuerpo had until May 27 to decide whether to refer the case to the Council of Ministers, which will decide on the intervention. In theory, what the Executive can do now is modify the conditions previously agreed upon by the CNMC, and it could even tighten them so much that they force BBVA to withdraw, although some legal experts doubt it has that legal capacity.

To make this decision, the Executive relied on an unprecedented public consultation, which sought opinions from anyone who wished to comment on the takeover bid. The aim, in short, was to seek public support for its involvement in the operation, and the Government has been trying for two weeks to convince everyone that this is not a "yes or no" referendum, but rather a way of acting with "all the necessary guarantees," as Cuerpo points out. However, this consultation has now been submitted to the National Court by a law firm , Statera Legal, which also requests injunctions to prevent the results from being used, as they consider it to violate the Constitution's principle of equality, among other things.

This referendum has aroused enormous misgivings in the financial sector, as well as among businesses and economists, due to its anomalous nature. But that hasn't stopped the government from moving forward with its intentions. Banks and investors consider the government's referendum "arbitrary and populist," as ABC reported. Not only that: the referendum itself allowed the same person to participate thousands of times, even with false IDs, although the Ministry of the Economy said it would review the responses.

The government's intervention has also generated reactions at BBVA . Its president, Carlos Torres , stated in an interview several days ago that there was no reason to refer the case to the Council of Ministers, in one of the few clashes the Basque bank has had with the government throughout the takeover bid. "We believe the operation should not be referred to the Council of Ministers because, far from negatively affecting any element of general interest, the operation is a good one," he said.

At Banco Sabadell , for its part, although two months ago they appealed to the government to torpedo the operation, they are now much more cautious about taking such a close position with the Moncloa, which has always rejected the operation. In any case, the Catalans did participate in the consultation, while BBVA did not.

The body confirmed that the public consultation was well-received by society and that it "has been useful" for the government to gauge public sentiment. It also revealed that the results of the consultation point to "the existence of reasons of general interest that may be affected by the operation."

Following the decision by the National Body, which was more than expected given the government's position from the outset of the takeover bid, the operation enters completely uncertain territory regarding the arguments that the Moncloa government would use. They will also have reports from the main economic ministries, such as Industry, Finance, and the Ministry of Economy itself.

What is clear is that the Executive also has limits on its intervention. Competition regulations establish that the Government may intervene but cannot use competition criteria to justify its decision, as these have already been analyzed by the CNMC.

They will have to use criteria of general interest, as established by law, that are distinct from competition. The law lists several of these: national defense and security, protection of public safety or health, free movement of goods and services in Spain, environmental protection, promotion of technological research and development, and ensuring adequate maintenance of sectoral regulatory objectives. The government is partially adhering to these criteria, but not exclusively, and it remains to be seen how it would use them to toughen conditions for BBVA.

However, legal experts believe that this list is not exhaustive, but rather appears in the law as an example, and that, therefore, they could use the broad scope of the term "general interest." The takeover bid remains in the hands of the government.