EU to study aftermath of liberalisation

Date: 28/05/1998

By Chris Johnstone

ENERGY Commissioner Christos Papoutsis has called for the EU to weigh up the employment consequences of electricity and gas liberalisation for power companies and the rest of European industry.

The study will be launched as debate continues over what form the opening up of the electricity sector will take in countries such as France, Europe's second biggest national market, and Italy. The staged opening of the EU's electricity market begins in February 1999, with the gas market to follow a year later.

Although the European Commission expects an overall increase in jobs in the energy sector, which already employs more people than any other in Europe, there will be substantial disruption as existing companies adapt and new entrants arrive.

The Commission study will aim to predict whether firms will shed employees or retrain them, and consider how far job creation and losses will coincide.

Although governments will take the lead in deciding how to cushion the impact of disruption, the Commission hopes to play a role as 'facilitator' by pointing out what is likely to happen and what should, and can, be done.

The scope of liberalisation is still under discussion in France, where the Socialist-led government has yet to pass legislation specifying what form it will take. But trade unions are already expressing concerns over their members' working conditions.

Electricity giant Electricité de France (EDF) is pressing for the employment conditions imposed on the company by 1946 laws which nationalised broad swathes of French industry to be extended to market newcomers, fearing its costs will otherwise be far higher than those of rivals.

Studies by the EDF, which provides and distributes 95% of France's electricity, estimate that its employee costs are 50% higher than potential competitors because of retirement, pension and company benefit schemes.