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Unbundling Of EU Energy Markets? Not If The French And Germans Get Their Way
The Brussels Peak in June saw the new French President Nicolas Sarkozy succeeded in convincing the ECU to drop its dedication to agree and undistorted competition from its reform treaty. Though Competition Commissioner Neelie Kroes disagrees this could have tiny impact on Brussels tricky position against conglomerations, illegal subsidies and protectionism ; many legal pros support the position the new arrangement will weaken the Commissioner’s capability to tighten up on such continuing practices.
As if to rub salt in the wounds, recent comments following the approved merger between GDF and Suez by Jean-Pierre Jouyet, France, Europe Minister are likely to further inflame relations. Referring to the merger, Jouyet remarked to journalists: its a vision of what could be the energy policy for Europe? This must be particularly upsetting to Kroes who has been careful to ensure that the merger was scrutinised from top to bottom to seek out any adverse effect on competition, also making certain the disposal of assets and concessions formed the founding conditions for any potential deal.
To retaliate, Jouyet further expanded on the growing division between Paris and Brussels by saying that Kroes?unbundling plan was an ideological view, we’ve got a strategic view. It’s a better balance between EU interests and competition rules?
Since this fragile and public series of events, Kroes has made no effort to hide her grit to battle nail and tooth against the protectionist policies of the French, German and Spanish member states. Though she stayed silent in the peak talks, one observer believes that Ms. Kroes and her counsels were alarmed at the clear shortage of concern from liberal nations like Britain and Sweden and also from Jose Manuel Barroso, EU Commission President? Mr Barrosso appeared convinced previously that erasing competition as an objective had no legal bearing, since the policy was discussed thirteen times somewhere else in the accord. the French presidency and other legal gurus obviously think differently.
Whatever the legal contentions, the Commission will this month present detailed proposals for an overhaul of EU energy market regulations. EU Energy Commissioner, Andris Piebalgs is expected to suggest that the integrated groups within member states be forced to sell their electricity grids and pipeline networks a definite first step towards unbundling. But just how far this will be allowed to progress depends greatly on the strength of the influential French and German lobbies.
So, why should a business inside a single ECU member state concern itself with what is occurring with competition policy across all of the EU? Any effort to suppress competition in Europe will have a big effect on our UK market. As we are highly dependent on Europe for most of our energy supply and as current EU practices falsely peg the wholesale gas price to the cost of oil, it is in our best interest to see a split of the unhealthy dominant forces which control and warp the market mechanism.
Examples of this distortion are presently getting investigated by the Commission. These concerns surround the withholding of production capacity on electricity markets with the view to raise costs.
Lastly, commentators have asserted there’s abuse of electricity balancing markets and since this is certain to have best effect on more recent entrants and therefore, for smaller players who continually rely on these sources, it’s a limiting factor on the enlargement activity of these enterprises.
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Evans D. Smith
