WRITTEN QUESTION E-2262/99

by Ward Beysen (ELDR) to the Commission

(13 December 1999)

Subject: Directive 96/92

The liberalisation of energy markets is producing a wave of concentration, and the first international mergers or take-overs have already been announced. What is the Commission's view of these developments, and to what extent is account being taken of their implications for employment?

Directive 96/92(1) lays down basic principles concerning the liberalisation of the European electricity market, seeking to ensure that, from the point of view of economic operators, this process takes place on equal terms in the various Member States. The Commission's second harmonisation report summarises aspects which remain to be dealt with in order to ensure such equivalent liberalisation, but does not mention the distortion of competition by the various ownership structures of electricity companies in the European Union. In view of the differences in the capital costs of private companies quoted on stock exchanges and public enterprises, private enterprise increasingly faces unequal competitive conditions, both when acquiring new businesses and when directly offering products and services on the market. How will the Commission correct this distortion?

(1) OJ L 27, 30.1.1997, p. 20.

Answer given by Mrs de Palacio on behalf of the Commission

(21 December 1999)

As the Honourable Member rightly points out, the Commission has to make sure that liberalisation is carried out whilst taking into account legitimate concerns about employment prospects in the electricity industry. It is clear that restructuring will take place, but it is clear as well, that there is a pressing need to introduce competition into this sector. The liberalisation process increases competitiveness of Community industry, and will thus have a positive impact on employment in energy intensive industries. Furthermore, it provides positive benefits to individual citizens. According to the preliminary results of a study just received by the Commission, electricity prices for households between 1996-1998 fell just as quickly as industrial prices.

Member States have the primary responsibility in the field of employment, but the Commission acknowledges the need for it to play a leading role in this respect and has launched a study on this subject. The objective of the study is not to measure the quantitative effects on employment in the electricity industry. This is impossible taking account of the growth in employment in the energy intensive industries as a result of lower electricity prices, and would provide a distorted picture. The objective is however to disseminate and learn from experiences in countries where liberalisation of the electricity industry has already taken place and to guide Member States as to retraining of workers, creation of new employment in new sectors within the electricity industry, description of job profiles most at risk and good ways of

redeployment. The first results of the study are expected by the beginning of 2000. The Commission will communicate these immediately to the Member States and determine what follow-up action will be necessary.

As for the question of possible unequal starting positions of competing companies due to the fact that some are state owned, whereas others are privately owned, the Commission will actively monitor the behaviour of competitors in the electricity industry, as it does in other industries. The Commission's role is to ensure that state owned companies or any company for that matter do not have undue advantages, for instance because of state aid that is not available for other companies. The Commission examines mergers and acquisitions and other dealing on the competitive market in this light.