WRITTEN QUESTION E-0079/00

by Margrietus van den Berg (PSE) and Dorette Corbey (PSE) to the Commission

(24 January 2000)

Subject: Privatisation of public services in the Netherlands

1. Is the Commission aware of the speech by Commissioner Bolkestein to the South Holland electricity utility (an edited version of which appeared in NRC Handelsblad of 7 January 2000) on the timidity towards the privatisation of public services which has apparently manifest itself in the Netherlands?

2. Does the Commission share his (very one-sided) view of Dutch politics?

3. Does the Commission subscribe to the desire expressed by the Socialist Group that the privatisation of public services should be accompanied by prior guarantees of fair competition and protection of the interests of consumers with regard to prices, quality and transparency, and does the Commission acknowledge that privatisation only makes sense if it really does result in more consumer options? Does the Commission share the view that if there are no such guarantees privatisation should not go ahead?

4. The price level of units of electricity and water consumed is an important instrument for encouraging the sustainable and efficient use of such products. Does the Commission share the view that with privatisation there is a risk of governments relinquishing control of this instrument for encouraging more environmentally-friendly consumer behaviour?

Answer given by Mrs de Palacio on behalf of the Commission

(29 February 2000)

1. The Commission has taken note of the speech mentioned by the Honourable Members. It has done so through the edited version of this speech that appeared in NRC Handelsblad of 7 January 2000.

2. and 3. The EC Treaty in its Article 295 (ex Article 222) stipulates the following: This Treaty shall in no way prejudice the rules in Member States governing the system of property ownership. The Commission is, therefore, neutral as regards ownership of companies. The Commission does monitor the behaviour of companies and applies the same test to them all disregarding ownership, in virtue of the relevant competition and state aid rules.

However, this neutral position does not apply to liberalisation, which is very much the central plank of the policy the Community is pursuing in the energy area. The Commission sees liberalisation as the best way forward in the energy field, since it leads to an improvement of the competitiveness of European industry. This effect is already very evident in the electricity sector in the Community, where electricity prices are coming down significantly from the pre-liberalisation levels. The Commission also notes that prices are coming down fastest in Member States that have chosen the most liberal approach towards the opening of their electricity markets.

However, as regards public service levels, the Commission is confident that these will not be lowered due to liberalisation in the energy sector. In fact, experience shows that the level of public service delivered in a liberalised market may even be higher than the public service rendered in a monopoly market. When customers are faced with the choice that liberalisation brings, public service levels are an important factor in determining their choice.

Furthermore, the Commission regards it as vital that public service standards in the widest sense constantly improve in the single market. The Commission will take an active policy of benchmarking public service standards in the energy sector at national level in 2000 and may, as appropriate, propose codes of best practice to ensure increasing standards throughout the Community.

4. The Commission does not believe that governments can only encourage environmentally friendly consumption patterns for energy and water through pricing policy and via state ownership of these

utilities. In fact, the Commission is of the opinion that in a liberalising market, environmentally friendly consumption patterns can be just as well encouraged by governments through other instruments. A good example of this concerns the consumption of renewable generated electricity. The Commission envisages proposing appropriate measures in this sense, notably in the field of the access of electricity from renewable energy sources to the single electricity market.