No deal on horizon for electricity

Date: 14/12/1995

By Fiona McHugh

THE EU will try once again this week to patch up member state differences over plans to liberalise the bloc's electricity market.

But as energy ministers bought themselves more time in which to reach a deal, industry experts were declaring the whole affair an exercise in futility.

“If they have not reached agreement after months of talks, then I very much doubt that they will do so in the next six days,” said one electricity producer.

With member states still at odds and public sector strikes raging on in Paris, energy ministers decided to put off a crucial meeting which had been scheduled for today (14 December) until 20 December.

“The delay should allow positions to be brought closer together,” said Energy Commissioner Christos Papoutsis. But his optimism is shared by few diplomats involved in the talks.

Member states' representatives have attended a host of meetings in the past six weeks in a desperate attempt to heal rifts over a liberalisation package which has been languishing in the Council of Ministers for over five years.

The main sticking point is whether or not distributors, as well as producers of electricity, should be included in the deal, with Germany and the UK insisting that they should and France demanding their exclusion.

Hopes of a compromise deal mooted by Spain were dealt a potentially fatal blow when French energy workers joined transport and postal workers in a public sector strike against welfare reform proposals. That strike, now in its third week, has brought Paris to a standstill and thrown the government into crisis.

Electricité de France (EdF), the state-owned monopoly which controls both the production and sale of electricity at the moment, has fiercely resisted plans to open up the market, arguing liberalisation would lead to heavy job losses and patchy service.

Its participation in the strike comes as a stern warning of the kind of havoc it could wreak if France were to bow to pressure from its EU partners at next week's ministerial meeting.

Whether member states will be able to reach an agreement in spite of this remains to be seen, but is looking less and less likely.

Meanwhile, the Commission has approved a White Paper listing its future energy priorities.

The paper agreed yesterday (13 December) underlines the need for a common policy in this area, which it says would boost European competitiveness. It also stresses the importance of security of supply for the Union, with energy consumption on the rise and an increasingly volatile political climate in many of the EU's supplier countries.

Papoutsis, whose country Greece draws most of its supplies from northern Africa and Russia, neither of which is in a stable political shape, has shown himself to be particularly concerned about having too many eggs in a few, potentially explosive baskets.

But despite his enthusiasm for the subject, the White Paper offers few concrete measures to achieve this aim or promote the use of environmently-friendly energy, another of the priorities pin-pointed by the document.

It recommends implementing tax measures aimed at changing consumer behaviour but, at the same time, says such measures are unlikely to be agreed by ministers.