De Palacio and Monti at odds over energy liberalisation push

Date: 21/02/02

By Laurence Frost

TWO European Commissioners have pledged to invoke little-used powers to force member states to open up markets if there is no deal on electricity and gas liberalisation at next month's Barcelona summit.

But differences have emerged between Loyola de Palacio and Mario Monti, the energy and competition commissioners, over a possible compromise designed to overcome French and German objections.

Both commissioners threatened separately this week to issue a unilateral 'Commission directive' if heads of state do not agree on a timetable for full market opening.

'We need concrete commitments in Barcelona,' said de Palacio in an interview yesterday (20 February) with European Voice. 'If the Council fails [to agree on them], the Commission is ready to act. We should use the treaties.'

Article 86 of the EU Treaty - used in the 1980s to force open telecommunications markets - empowers the Commission to issue 'appropriate directives or decisions' to prevent governments from giving certain companies special treatment or shielding them from competition. The energy chief's blunt comments will end speculation that the EU executive had resigned itself to a lack of progress on liberalisation until after the elections in France and Germany this summer.

They echo similar remarks by Monti, who said on Tuesday (19 February) the Commission was 'actively considering' using article 86 in the absence of a breakthrough at the 15-16 February summit.

But the competition chief voiced 'concern' over a compromise deal favoured by de Palacio, that would delay the liberalisation of power sales to domestic consumers while pushing ahead with market-opening for industrial customers.

'If the final text departs noticeably from the Commission's proposal,' Monti told MEPs, 'it will be even more difficult to ensure that competition rules are respected in the crucially important energy market.'

Monti's comments drew a terse response from de Palacio, who said: 'I am the [commissioner] responsible for energy - nobody else but me.'

She said it was 'especially' important to have concrete commitments on industrial power market opening. 'Of course we must continue to ask for domestic market-opening as soon as possible, but whether this must happen in 2005 can be discussed.'

The final deadline for liberalisation of all electricity and gas sales under the proposals tabled by the Commission last March is 2005, with industrial electricity and gas supplies to be opened up in 2003 and 2004 respectively.

De Palacio hopes a show of flexibility on liberalisation of domestic power supplies could be enough to secure a deal with France, whose resistance to setting firm dates is underpinned by fierce trade union opposition at home.

• A full interview with Loyola de Palacio will appear in next week's special report on energy.

European Commissioner for energy and transport, Loyola de Palacio, and European Commissioner for competition, Mario Monti, have pledged to invoke little-used powers to force Member States to open up markets if there is no deal on electricity and gas liberalisation at the forthcoming Barcelona summit although their opinions differ over a possible compromise designed to overcome French and German objections.

European Commission: DG Energy and Transport: Energy: Gas http://ec.europa.eu/comm/energy/gas/index_en.htm

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