WRITTEN QUESTION E-3469/02 by Ward Beysen (NI) to the Commission. The concentration on the Czech electricity market in the process of enlargement.
Date: 2002-12-06
Institutions: European Parliament, Provisional data
Subjects: Community acquis, Czechia, accession to the European Union, competition policy, economic concentration, electrical energy, electricity supply, liberalisation of the market, merger control

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WRITTEN QUESTION E-3226/02

by Theresa Villiers (PPE-DE) to the Commission

(14 November 2002)

Subject: Safety of crash barriers for motorcyclists

In a meeting between Mr Carlos Bautista and Commissioner Loyola de Palacio in September 2001,
the Commissioner admitted that the current design of crash barriers is dangerous for motorcyclists.
The Commissioner assured that immediate action would be taken to resolve this problem.

Could the Commission explain what steps have been taken to improve the safety of crash barriers for

1.
motorcyclists?

2. What
motorcyclists?

future plans does the Commission have to improve the safety of crash barriers for

Answer given by Mrs de Palacio on behalf of the Commission

(18 December 2002)

The high level of unsafety of motorcyclists is of major concern to the Commission and the problem is
therefore attacked from different angles. It should be reminded that Member States are responsible for
equipping roads with effective safety restraint systems including crash barriers.

The Commission has mandated the Committee for European Normalisation (CEN) to elaborate a new
harmonised European standard on the basis of the existing EN 1317 on road restraint systems, which will
require any road restraint systems to be submitted to CE marking. Thus restraint systems that are put to
the market will have to meet minimum common safety performance requirements. In its current form, this
standard does however not
in time, different
include specific tests for motorcyclists. At
experimental solutions exist to fulfill the needs of this group of road users.

this point

Black spot management and information to motorcyclists at stretches of road that have shown to be prone
to motorcylce accidents are reckoned to be effective on a short term basis. To this end, the Commission
has announced a proposal for a directive on black spot management in its workplan for 2003 (1).

(1) COM(2002) 590 final.

(2004/C 70 E/011)

WRITTEN QUESTION E-3469/02

by Ward Beysen (NI) to the Commission

(6 December 2002)

Subject: The concentration on the Czech electricity market in the process of enlargement

Currently, the Czech government is preparing a concentration of competitors through an acquisition by
the joint stock company CEZ a.s. of shares in eight regional electricity distribution companies from the
National Property Fund. This has been published in the Commercial Bulletin on 24 July 2002.

On the one hand, this initiative will constitute a vertical integration of generation and supply of electricity
on the Czech markets; on the other hand will this also create horizontal integration of the distributors.
As a result, the new CEZ-Group will control more than 70 % of the generation and 2/3 of the national
electricity supply.

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Therefore, it is useful to clarify following questions:

1. Could the proposed concentration have negative effects on the relevant markets, particularly in
generation, sales and trading between Czech competitors and consumers and those from the EU?

2. Could the proposed concentration negatively influence the competition or even reverse the benefits of
liberalisation of the electricity market? Would it influence choice and prices for competitors and
consumers? Would it affect the level of interest of potential and current investors? Could it eliminate
the development of objective, transparent and non-discriminatory market conditions?

3.

4.

5.

Is the purchase price a market price which could be obtained if the package of shares of the regional
distribution companies would be sold on the basis of a public tender? If not, does the concentration
represent a public subsidy in the form of a discounted sale of shares?

In connection with the concentration, CEZ is supposed to sell a part of its shares in CEPS, the
principal Czech electricity transmission company, to the Ministry of Labour and Social Affairs and
another company wholly owned by the State Property Fund. If the price to be paid for these shares to
CEZ is substantially above the fair market price, does this represent a support granted to CEZ from
public funds? In combination with the discounted sale mentioned under 3, does it represent a case of
cross subsidy by the state? Could this affect the trade between the Czech Republic and the EU, because
of the competitive advantage of CEZ?

Is this concentration covered by Article 79 of the CZ-EU Association Agreement, according to which
the Czech Republic has to develop the energy sector according to the rules of a market economy?
Finally, does this concentration respect the ‘acquis communautaire’ and the European competition
rules?

Answer given by Mr. Verheugen on behalf of the Commission

(28 January 2003)

The Commission continues to monitor developments in the energy sector of the Czech Republic with
reference to the energy ‘acquis’ and the competition policy obligations of the Czech Republic under the
Europe agreement and in the framework of the commitments made in the accession negotiations.

However, the concentration referred to by the Honourable Member is subject to the jurisdiction of the
Czech competition authorities, since the Union merger regulation applies only to companies with a
minimal turnover of EUR 250 million in the Community.

Subject to the above, the following remarks can be made in response to the questions which have been
raised.

1.

It is possible that concentration of generation, sales and trading may limit the extent of competition
somewhat in the national market and therefore is not ideal from that point of view.

2. The proposed concentration does not reverse the benefits of the ongoing liberalisation process.
It should be noted that the eligible customers will retain their right to freely choose a producer. The
latter is subsequently guaranteed access to the transmission and distribution network by law.
Furthermore, the development of transparent and non-discriminatory market conditions remains the
responsibility of the Energy Regulatory Authority which has been established in compliance with the
acquis.

3.

4.

It is the responsibility of the national competition authority to ensure that the purchase price of the
shares of regional distribution companies does not represent hidden state aid.

Similarly, it is the responsibility of the national competition authority to ensure that the selling price
of the shares of the transmission company CEPS does not represent hidden state aid.

5. This concentration is covered by Article 64 of the Association Agreement between the Czech Republic

and the Union regarding the application of the competition acquis.

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The policy pursued by the Czech government is not in contradiction with the competition/liberalisation
‘acquis’ in the Union. Some European companies in the electricity sectors are vertically integrated and the
European Union liberalisation directives currently in force in these sectors only require separate
management and accounts, not legal or ownership unbundling. The Commission’s proposals for a new
Directive on the electricity and gas markets would in addition require legal unbundling but this already
exists in the Czech Republic.

The Czech electricity transmission operator is an independent legal entity, which is compatible with the
Directive 96/92/EC of the Parliament and of the Council of 19 December 1996 concerning common rules
for the internal market in electricity (1).

(1) OJ L 27, 30.1.1997.

(2004/C 70 E/012)

WRITTEN QUESTION E-3542/02

by Glenys Kinnock (PSE) to the Commission

(11 December 2002)

Subject: Trade-related assistance

Would the Commission clarify how the calculation will be made for the amount of funding for which ACP
countries will be eligible for trade-related assistance?

Answer given by Mr Nielson on behalf of the Commission

(27 January 2003)

For some time now development cooperation with African, Caribbean and Pacific (ACP) countries has paid
attention to trade-related assistance. This took place in a variety of forms, for example as a key component
of support for regional integration initiatives, or to address specific issues such as improving customs data.
In many cases trade-related assistance was part of a wider operation such as agricultural export promotion
or infrastructure development.

Despite the importance that is attached to trade issues, the Cotonou Agreement does not prescribe a
particular allocation for trade-related assistance. Within the available envelopes for national and regional
programmes, it is the dialogue with and among the beneficiaries and stakeholders that determines the
allocation. Hence, there is no specific calculation for the amount of funding for trade-related assistance.
The same applies to any other important development theme.

The 9th European Development Fund (EDF) guidelines for regional programming suggested a minimum
allocation of 20 per cent for trade-related assistance. With most of the regional programmes now finalised,
it is clear that this figure has been greatly exceeded: the allocation for regional integration and trade-related
assistance in regional
indicative programmes is between 40 and 50 per cent of the initial amount
i.e. EUR 280 to EUR 350 million. The regional infrastructure programmes also include significant trade
facilitation components. In addition, there are intra-ACP funds of which EUR 50 million have been
earmarked for trade-related assistance.

Because the national strategy papers and indicative programmes often contain open-ended capacity
building and technical assistance programmes, it is not possible at this stage to put a strict figure on the
share of trade-related assistance. A rough estimate would put the amount of trade-related assistance to
around EUR 150 million.

Adding to the above figures some intra-ACP programmes (including support for World Trade Organisation
(WTO) and Economic Partnership Agreements (EPA) preparation and for Sanitary and Phytosanitary
compliance)
least EUR 600 million are available for trade-related
that recently came on stream, at
assistance to ACP countries for the coming years.