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 injuries, current comments following the authorized merger between GDF and Suez by Jean-Pierre Jouyet, France, Europe Minister are probably going to further inflame relations. Referring to the alliance, Jouyet remarked to hacks : its a vision of what may be the energy policy for Europe? This has to be especially disturbing to Kroes who has been careful to make sure that the coalition was scrutinized from top to bottom to find 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 delicate and public series of events, Kroes has made no attempt to hide her determination to fight nail and tooth against the protectionist policies of the French, German and Spanish member states. Although she remained silent during the summit negotiations, one observer believes that Ms. Kroes and her advisors were alarmed at the apparent lack of concern from liberal countries such as Britain and Sweden and also from Jose Manuel Barroso, European Commission President? Mr Barrosso seemed convinced beforehand that erasing competition as an objective had no legal bearing, since the policy was mentioned 13 times elsewhere in the treaty. However, the French government and other legal experts clearly 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 happening with competition policy across all of the EU? Any effort to suppress competition in Europe will have a significant effect on our UK market. As we are highly conditional on Europe for a lot of our energy supply and as current Western european practices falsely peg the wholesale gas price to the cost of oil, it is in our best interest to see a break up of the unhealthy dominant forces which control and twist the market mechanism.
Examples of this distortion are currently being investigated by the Commission. These concerns surround the withholding of production capacity on electricity markets with the view to raise prices.
Lastly, commentators have claimed there is abuse of electricity balancing markets and since this is likely to have greatest effect on newer entrants and thus, for smaller players who regularly depend on these sources, it is a limiting factor on the expansion activity of these businesses.
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