UPDATE 2-Spain widens restrictions on foreign takeovers to bids from EU companies

(Adds details on 500 mln euro threshold, context on Air Europa)

MADRID, Nov 17 (Reuters) - The Spanish government on Tuesday widened restrictions on foreign takeovers of strategic Spanish companies so that they also apply to bids coming from companies based in the European Union, Economy Minister Nadia Calvino told a news conference.

The restrictions will be in place until the end of June and do not constitute a ban, but during that time foreign companies will have to submit takeover proposals to the government for evaluation when planned investment exceeds 500 million euros ($594 million), Calvino said.

It was not immediately clear whether the rule would affect the potential acquisition of Spanish carrier Air Europa by International Consolidated Airlines Group (IAG), the owner of Spain’s flag carrier Iberia.

British Airways owner IAG agreed to buy Air Europa for 1 billion euros last November, but has been seeking to reduce the price amid the travel crisis caused by the pandemic.

Earlier on Tuesday, news website El Confidencial cited unidentified sources as saying IAG had managed to cut the purchase price for Air Europa to 300-400 million euros ($355-$474 million).

The buyer would likely undertake the liability for the 475 million euro state aid package for Air Europa, approved earlier this month. That debt could bring total investment above the government-set threshold of 500 million. ($1 = 0.8418 euros) (Reporting by Belen Carreno and Inti Landauro, writing by Andrei Khalip, Editing by Ingrid Melander)