WRITTEN QUESTION E-2158/01

by Salvador Garriga Polledo (PPE-DE) to the Commission

(19 July 2001)

Subject: Commission's position on barriers to market liberalisation in some Member States

Some Member States are blocking or delaying the process of market liberalisation under way in the EU. This is true of the energy sector in France and Germany.

For example, France is maintaining two State monopolies in the energy sector, both expanding rapidly in competition with other liberalised European undertakings, with the support of the European Union.

Precisely because of this EU support, the question is continuously being asked why the Commission does not adopt a clear and firm stance on the matter, by taking measures against those countries which block or delay liberalisation.

How will the Commission tackle these restrictive practices, which various Member States are pursuing in this field?

Answer given by Mrs de Palacio on behalf of the Commission

(6 September 2001)

The Commission shares the concerns expressed by the Honourable Member regarding the existing inequalities in the current extent of liberalisation in the energy sector. In response to these concerns, during its meeting of 20 June 2001, the Commission underlined that the most effective and appropriate method of redressing the market opening imbalance, and distortions of competition that result, is the rapid adoption by the Council and the Parliament of the March 2001 proposals to complete the liberalisation of Community energy markets(1).

As regards differences in the current extent of liberalisation in the energy sector, the Commission considers that these should be addressed by the rapid adoption by the Council and the Parliament of the Commission's March 2001 proposals to further liberalise energy markets (all non-domestic electricity open to competition by 1 January 2003, non domestic gas open to competition by 1 January 2004 and all customers (including domestic) open to competition by 1 January 2005(2).

The Commission agrees that to address distortions of competition and inequalities in the short term before adoption of the further liberalisation proposals it will:

- monitor Member States to ensure timely and proper implementation of the existing electricity and gas liberalisation Directives

- and ensure that the EC Treaty's competition rules are applied fully in the energy sector. In particular, the Commission will continue to apply the rules of the Treaties on restrictive business practices and abuse of a dominant market position against restrictions and distortions in supply competition and against discrimination in network access, to scrutinise any State aid granted to electricity and gas companies (including State aid in the nuclear sector) and to apply competition rules against limitations on consumers' right to choose a supplier. Examples of such cases treated by the Commission in the last two years are the interventions against joint selling (e.g. GFU and EDF/CNR), reinforcements of dominant positions through mergers (e.g. VEBA/VIAG, EDF/EnBW), privileged network access (e.g. Danish/German and French/UK interconnectors), stranded costs schemes and locking-in of key customers (Gas Natural/Endesa).

If adoption of the proposals to further liberalise energy markets were delayed, the Commission would consider adopting itself Decisions or Directives, on the basis of Article 86 of the EC Treaty, and notably its third paragraph, to address possible distortions of competition resulting from different levels of liberalisation. Such an approach, whereby the Commission adopted Directives addressed to the Member States based on Article 86(3) of the EC Treaty, was previously used in the telecommunications sector.

(1) COM(2001) 125 final.

(2) IP/01/356.