The European Union, European Central Bank and IMF (EU/ECB/IMF) introduced the condition of “fostering the competition policy” as part of the financial assistance they will provide to Portugal in its effort to overcome the financial crisis.

In the Memorandum of Understanding signed, measures were asked to be taken, that aim to develop the philosophy of fostering and buttressing competition in all sectors of the economy and the legal framework of competition. The measures which also contain changes in the institutional structure of the country are expected to facilitate more efficient and speedier working of those agencies entrusted with the application of competition rules in Portugal.

Among the measures suggested by the EU, ECB and IMF in return for financial assistance are, in the first stage, setting up of a court specialized in competition law matters, reviewing the Portuguese Competition Act towards the end of the year and providing sufficient and continuous funding for the Portuguese Competition Authority.

The creditors also want the termination of a practice applied in privatizations which involves a so-called “golden share” being left in the hands of the public after privatization, as well as measures related to guaranteeing the independence of supervisory and regulatory agencies in the country.

Setting Up a Court Specialized in Competition Law

As it is included in the Memorandum of Understanding, it is expected that speedier and fairer solutions will be reached by setting up a specialized court to say the last word in competition law matters in the event that the decisions of the Portuguese Competition Authority are appealed against.

Preparing a New Competition Act

Also among the measures introduced within the framework of the financial assistance is a new Competition Act to be prepared taking account of the decisions taken and experience gained by the Portuguese Competition Authority through the investigations it has been carrying out within the scope of the existing Competition Act since its entry into force in 2003, as well as the case law formed by court decisions and developments in the EU practices.

Supporting the Independence of Regulatory Agencies

Also included as another condition of the financial assistance is having renowned international experts assess particularly the administrative and financial independence as well as the other activities of the regulatory agencies in Portugal. It is required that this assessment is done in consideration of the exemplary practices in the world.

A More Effective Competition Policy as Part of Growth

The Portuguese Competition Authority officials also add to their remarks that, during this adjustment process that their country is going through, more competition enforcement and advocacy is a vital “growth-enhancing” component.

Click for the letter sent by the Portuguese Competition Authority.