The Brussels Summit in June saw the new French President Nicolas Sarkozy succeeded in persuading the EU to drop its commitment to agree and undistorted competition from its reform treaty. Although Competition Commissioner Neelie Kroes argues this will have little impact upon Brussels tough stance against cartels, illegal subsidies and protectionism; many legal experts support the stance that the new arrangement will weaken the Commissioner’s ability to crack down on such ongoing 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 European 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 suggestions for an overhaul of ECU energy market regulations. ECU Energy Commissioner, Andris Piebalgs is predicted to proffer the integrated groups inside member states be compelled to sell their electricity grids and pipeline networks a definite initial step towards unbundling. But just how far this can be permitted to progress depends significantly on the power 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 at present being probed by the Commission. These concerns surround the withholding of production capacity on electricity markets with the view to raise costs.
Lastly, commentators have announced there’s abuse of electricity balancing markets and since this is probably going to have best effect on more recent entrants and so, for smaller players who continually depend on these sources, it’s a limiting factor on the growth activity of these companies.
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