Part of complete coverage on
Iberdrola CEO: High tax hurting European energy sector
February 14, 2013 -- Updated 1926 GMT (0326 HKT)
- Based in Bilbao, Iberdrola is also the world's largest producer of wind energy
- Iberdrola reported a 36% fall in net profits in Spain for 2012 despite heavy investment
- Spain -- where Iberdrola is headquartered -- is the eurozone's fourth-largest economy
(CNN) -- High tax is hurting European competitiveness in the energy sector, according to Iberdrola chief executive Ignacio Galan.
Galan, boss of Spain's largest energy company, said European governments are over-taxing the industry because they believe utility businesses are "too rich."
Galan added the industry: "Is not as competitive as the American one... we are paying approximately 50% taxes when the American system is 10%."
Spain -- where Iberdrola is headquartered -- is the eurozone's fourth-largest economy with unemployment at 26.1%, second only to Greece in the single currency bloc, according to Eurostat data.
Iberdrola combats some of that slump, Galan told CNN. the sector employs "750,000 people directly so we can already help the governments to create wealth and to create jobs."
But in 2012, the company was hit by a 36% fall in earnings within Spain, despite investing 20 billion euros [$27 billion] into the country since 2001.
And Galan stresses that European governments, not just Spain, should consider the impact of taxes on corporate cash flows and reinvestment.
"If they are already taking money in cash flows, in taxes, then this money cannot flow into investment."
Based in the Basque city of Bilbao, Iberdrola is also the world's largest producer of wind energy.
Galan told CNN that today, less than 40% of the Iberdrola's business is dependent on the eurozone as the company diversifies its risk in other countries including the UK, U.S., Mexico and Brazil.
He added that the taxes imposed by European Union governments are not making reinvestment in Europe an attractive option.
"If we are not generating enough cash flows, then we are not going to invest in those areas," he said.
Part of complete coverage on
November 14, 2013 -- Updated 1706 GMT (0106 HKT)
Peer at the windows and you'll spot big colorful chairs, plastic plants and a huge bed, but this is no department store.
November 19, 2013 -- Updated 1006 GMT (1806 HKT)
There once was a time, many years ago, when the sounds of bagpipes struck fear into the stomachs of Englishmen.
November 11, 2013 -- Updated 1116 GMT (1916 HKT)
Greece is on the way to economic recovery as investor faith returns to the recession-ridden eurozone nation, an executive at Greece's largest bank has told CNN.
November 8, 2013 -- Updated 1200 GMT (2000 HKT)
Could Greece's famous spice help the country's farmers through a four-year long economic crisis.
November 1, 2013 -- Updated 1307 GMT (2107 HKT)
One of the masterminds behind the euro says Europe would have suffered a far worse fate if the single currency had never been created.
October 31, 2013 -- Updated 1741 GMT (0141 HKT)
Nina Dos Santos visits the Dutch city where the European treaty carrying the city's name came into force 20 years ago.
October 25, 2013 -- Updated 1510 GMT (2310 HKT)
As Spain continues its drive to slash budgets and cut spending, one of the nation's favorite pastimes is under threat as ministers look for ways to boost productivity.
October 24, 2013 -- Updated 1617 GMT (0017 HKT)
The high commissioner of Brand Spain talks about getting the country back on its fee and attracting business.
October 17, 2013 -- Updated 1632 GMT (0032 HKT)
Jim Boulden looks at countries that have come to the brink, and even defaulted on their debt in the past.
October 17, 2013 -- Updated 1625 GMT (0025 HKT)
The head of the International Monetary Fund is warning European governments against complacency after growth returns to region.
November 7, 2013 -- Updated 1659 GMT (0059 HKT)
Portugal will avoid a second bailout when its current financial aid program expires in the spring of 2014, according to the boss of the country's largest energy provider.
October 11, 2013 -- Updated 1122 GMT (1922 HKT)
Could the Portuguese staple of sardines become one of the hooks which would lift the Iberian nation out of recession?
September 26, 2013 -- Updated 1720 GMT (0120 HKT)
Isa Soares sits down with the CEO of Henkel Kasper Rorsted for his take on what Merkel's win means for German businesses.
September 28, 2013 -- Updated 1406 GMT (2206 HKT)
As Germany's switchover from nuclear power gathers pace, concerns are mounting over the cost to the country's already squeezed consumers.
September 20, 2013 -- Updated 1655 GMT (0055 HKT)
The financial crisis has driven a wedge through Europe, with two economies emerging and -- more dangerously -- a psychological split between the north and the south, European leaders have told CNN.
September 26, 2013 -- Updated 1224 GMT (2024 HKT)
German Chancellor Angela Merkel seems the antithesis of a modern-day politician. Nina dos Santos explains why this works.
September 9, 2013 -- Updated 1250 GMT (2050 HKT)
The use of chemical weapons in Syria is a "tragic mistake" but Italy will only participate in military action with the approval of the United Nations Security Council, according to the country's finance minister.
September 13, 2013 -- Updated 1018 GMT (1818 HKT)
What a difference a year makes. Last year, delegates at the Ambrosetti Forum in Italy had a lot to contend with. The air feels a little different now.
Today's five most popular stories