Legal action against gas rebels in pipeline

Date: 14/09/00

By Renée Cordes

THE European Commission formally warned France, Luxembourg and Portugal this week that they could face legal action for failing to introduce national legislation to liberalise their gas markets in line with EU rules.

However, Transport Commissioner Loyola de Palacio said she was pleased with overall progress towards opening up the sector to competition. "Liberalisation is well under way and the first effects on prices and European companies competitiveness should be seen in the near future," she added.

Under EU legislation which came into force on 10 August, member states are required to open up at least 20% of their domestic markets to competition, with 28% of the sector due to be opened up within five years and 33% within a decade. France admitted in May that it could miss the August deadline by up to four months, and the Commission informally cautioned Germany and Luxembourg before the summer break that they were also lagging behind.

Officials said this week that the EU executive had no choice but to start legal proceedings against countries which had not yet put the required national laws into place - even if, in practice, they were opening up their markets.

They added that the Commission would decide in the coming weeks whether to pursue action against Germany as well. Berlin insists that it has created the right conditions for an open market and that this should be taken into account.The threatened action against France comes despite Gas de France's promise to open up its own network to competitors. Paris also received a warning letter this summer over its failure to comply with the EU's electricity liberalisation rules.

The European Commission has formally warned France, Luxembourg and Portugal that they could face legal action for failing to introduce national legislation to liberalise their gas markets in line with EU rules.