WRITTEN QUESTION E-1811/01

by Luis Berenguer Fuster (PSE) to the Commission

(19 June 2001)

Subject: The internal electricity market and competition

The Spanish Government repeatedly maintains that it has liberalised the electricity sector (and that it did so even before it was required to by law), although such a claim does not correspond to reality. The generating companies are still the same ones as were in operation in the days of the oligopoly and there is no evidence of competition on the distribution side either, since there has been only a 1,5 % shift in the market. If that were not enough the Spanish electricity companies' costs of transition to competition (CTC), which were calculated on the basis of asset

evaluations which the market has subsequently trimmed quite significantly, are being generously subsidised by users when they pay their monthly bills. In a recent appearance before the Committee on Economic and Monetary Affairs, Mr Monti, Commissioner, reversed his initial opposition to the Spanish Government's ban on the entry of foreign companies armed with public capital and demonstrated an indulgent attitude towards such a measure.

How does such a decision affect the competitiveness, on the market in public companies, of the actions of those wishing to acquire another company?

If the reason for refusing to allow French, German or Portuguese public companies to buy shares in companies from other European countries is the fact that they have received public aid, does the same apply in the case of the CTC received by Spanish electricity companies?

For the purpose of speeding up the liberalisation of the electricity sector, would courses of action other than the ones taken by the Spanish Government (which prevent the internal market from being achieved) not be more effective?

Answer given by Mr Monti on behalf of the Commission

(11 October 2001)

The Commission is neutral as regards the public or private character of companies, in accordance with Article 295 of the EC Treaty (former Article 222). Consequently, the public character of a company is not deemed relevant under the competition rules when it decides to acquire another company.

The EC Treaty and Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 88 (former Article 93) of the EC Treaty(1) spell out the Member States' obligations and the Commission's powers in the state aid field. These rules do not provide for a Member State to prevent public companies from another Member State from acquiring shareholdings in companies located in the first Member State on the pretext that the companies in question had received state aid within the meaning of Article 87(1) (former Article 92(1)) of the EC Treaty. Therefore no legal problems arise in connection with the question raised by the Honourable Member.

In answering the Honourable Member's third question, the Commission refers to its Press Release of 20 June 2001(2) which indicates that, in the meeting held on that date, the Commission reiterated the need for the Council of Ministers and Parliament to adopt without delay the March 2001 proposals for the full liberalisation of Community energy markets. It also stated that it was determined to ensure that the Treaty's competition rules were applied in full in the energy sector.

(1) OJ L 83, 27.3.1999.

(2) IP/01/872.