The European Commission has expressed disquiet over the deadlock in liberalising Europe’s energy sector and has called on governments to act. This follows warnings from regulators that companies in Germany are becoming dangerously entrenched.
Despite a flurry of liberalisation ten years ago, the EU’s energy market remains largely fragmented, and further reform proposals in Barcelona in March have not been acted upon.
The measures were intended to open the electricity and gas markets completely by 2005. The agreement stated that non-household consumers, which make up 60 per cent of the market, would have the freedom to choose their own power suppliers, while stipulating that the EU should decide on any additional liberalisation before March 2003. Ministers have so far failed to turn this compromise deal into legislation.
The Council of European Energy Regulator has also written to energy commissioner Loyola de Palacio, expressing concern that the market rules and industrial structures needed to allow a single market to function are not in place.
Germany has attracted the wrath of many industrial concerns, which cite a lack of transparency that in effect shuts out competitors. The E.On-Ruhrgas deal is seen as typical. The Commission maintains, however, that it has no jurisdiction over the merger, since two thirds of each company’s sales fall within Germany. The decision has thus fallen to the state authorities, which have approved the deal.