WRITTEN QUESTION P-0116/01

by Roberta Angelilli (UEN) to the Commission

(18 January 2001)

Subject: Privatisation and public utility service charges

In Italy public utility services are still subject to monopoly conditions and this is one of the main factors in maintaining high prices for households and businesses, producing adverse effects on competition and preventing the emergence of a truly competitive economic system.

The price increases being introduced in 2001 are considerable (gas + 3,7 %, water + 0,5 %, motorways + 1,79 %, railways + 5,2 %, RAI fees are to increase by ITL 3 000, Telecom + 140 % for households and + 9,3 % for businesses, and an increase in certain postal charges).

Behind this state of affairs lies the failure of privatisation policies, which have left control of blocks of shares in the hands of the Treasury, as in the case of ENEL, together with the fact that special conditions giving an advantage over competitors have been transferred into private hands, as in the case of Telecom.

The Commission:

1. Can it provide comparative studies of the countries of the EU as regards privatisation and public utility service costs?

2. Does it not consider that privatisation policy should not simply involve transfers from the public to the private sector, but should seek to create genuine liberalisation and maximum competition, to the benefit of users in terms of the cost and quality of services?

3. Does it not consider that a firm commitment is required in Italy and throughout the European Union in the public services sector in order to combat both public and private monopolies?

Answer given by Mr Solbes Mira on behalf of the Commission

(28 February 2001)

The Commission does not know of any comparative studies on the impact of privatisation on the costs of public service utility services. However, the Commission is monitoring the evolution of prices in the sectors which are being liberalised in accordance with Community legislation. For example, the Commission's Sixth Report on the Telecommunications Regulatory Package(1) shows that there has been a general downward trend in telecommunications tariffs since liberalisation began.

The Commission agrees that the fundamental determinant of the prices and quality of these services is the degree of competition in the markets. Opening up the markets to competition is a major aim of Community legislation relating to these sectors.

Community legislation in the fields of transport, telecommunications, electricity, gas and postal services is leading to the elimination of monopolies or, at least, their restriction to certain types of infrastructure whose duplication would be uneconomic (natural monopolies). In addition, a limited monopoly is permitted in the postal sector to the extent that it is necessary to finance universal service. However, the Commission has proposed an amendment of Directive 97/67/EC with regard to the further opening to competition of Community postal services(2) to reduce the scope of this monopoly segment. Furthermore, the sectoral legislation, together with Article 82 (ex Article 86) of the EC Treaty, provides an armoury of instruments for combating the abuse of monopoly positions. In addition to its own enforcement measures, the Commission encourages the national regulatory and competition authorities to apply these rules vigorously.

(1) COM(2000) 814 final.

(2) OJ C 337 E, 28.11.2000.