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Kicked into action, European Commission takes aim at Spanish clubs

© AFP

Text by FRANCE 24

Latest update : 2013-12-18

The European Commission said on Wednesday that it would launch an investigation into complaints that seven Spanish football clubs, including Barcelona and Real Madrid, had accepted illegal state aid.

The announcement came the day after EU Ombudsman Emily O’Reilly accused the Commission of dragging its feet over the complaint. She said the fact that Competition Commissioner Joaquin Almunia was minister in the government that signed off on the tax rules and is a fan of Athletic Bilbao – one of the clubs involved – could imply a conflict of interest.

Almunia strongly denied the suggestion. "The Commission has shown, and I in particular have shown, that I am not subject to a conflict of interest in applying the competition rules," he said.

O’Reilly also pointed out that while the Commission typically takes 12 months after a complaint is made to decide on the opening of proceedings, in this case more than four years had passed since the complaint by “several European clubs”, without any action.

The Commission said in a Wednesday statement that it "has opened three distinct in-depth investigations to verify whether various public support measures in favour of certain Spanish professional football clubs are in line with EU state aid rules."

The complaints concern state aid for Barcelona, Real Madrid, Bilbao, Osasuna of Pamplona, Valencia, Hercules of Alicante and Elche.

The Commission said it was concerned that the alleged aid had given these particular clubs an unfair advantage at a time when all clubs were struggling financially.

"Professional football clubs should finance their running costs and investments with sound financial management rather than at the expense of the taxpayer," said Almunia.

The first investigation will look into possible tax privileges for Real Madrid, Barcelona, Athletic Bilbao, and Osasuna.

The four clubs are the only member-owned clubs in the top two divisions in Spain and enjoy not-for-profit status. This means they have a preferential tax rate of 25 percent compared to 30 percent.

Several billion euros

O’Reilly’s office said the favourable tax treatment amounted to "several billion euros".

Miguel Cardenal, Spain’s secretary of state for sport, said “the taxation for Spanish clubs is a lot more burdensome,” compared with other European countries.

Jose Urrutia, the president of Athletic Bilbao, insisted that he would fight any attempt to force the four clubs to change their status.

"I have not planned a conversion into a limited company. The club belongs to the members and I don't think that model is in question."

Another inquiry will determine whether a land transfer between the City of Madrid and Real Madrid amounted to state aid.

In a complicated deal, a piece of land was valued at 595,000 euros when it was transferred from the city to the club in 1998 and at 22.7 million euros when it was transferred back in 2011, according to the Commission.

The third investigation will look into loans granted by the state-owned Valencia Institute of Finance for three clubs, Valencia, Hercules and Elche.

Jose-Manuel Garcia-Margallo, Spain's Foreign Minister, said before Wednesday's announcement that the Spanish government would "defend the clubs to the end".

"As far as I know there was nothing illegal," he said.

The three-part inquiry is the first step in a process that could lead to sanctions if it concludes that EU rules were broken.

'Takes us too long'

The European Commission said it was trying to speed up its work.

Antoine Colombani, a spokesman for competition policy, said the Commission received "around 300 complaints" per year and they were "well aware that it sometimes takes us too long" to deal with them.

"We are working to improve the handling of complaints," he said.

(FRANCE 24 with AFP, REUTERS)

 

Date created : 2013-12-18

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