PREVIEW-Court to settle EU-Spain spat over Endesa takeover

By David Lawsky and Jane Barrett

BRUSSELS/MADRID, March 3 (Reuters) - The European Union's highest court will settle a long-running dispute between Spain and the European Commission on Thursday in a ruling which could have a bearing on future takeover tussles in the country.

The judgment, on whether a country can interfere in a deal already approved by Brussels, concerns a failed 42 billion euro ($63.7 billion) takeover of Spanish utility Endesa (ELE.MC: Quote, Profile, Research).

But the underlying issue is very much alive because Madrid continues to impose conditions on energy deals already approved by Brussels.

The Commission rules each time that Spain has violated the law, but this has not discouraged Madrid and the focus has moved to the European Court of Justice in Luxembourg.

Spanish Industry Minister Joan Clos reiterated earlier this year his government's intention to impose conditions and said Madrid was ready to settle the dispute only at Luxembourg.

A Brussels-based lawyer said that was not surprising.

"These cases are a form of nationalism. It's difficult for states to resist the temptation (of intervening)", said Jean-Francois Bellis of law firm Van Bael & Bellis.

"You had the same problem with Portugal a few years ago, which shows this is not easy to solve once and for all."