France escapes swift action on energy law

Date: 08/04/1999

By Simon Coss

THE European Commission insists it cannot act on mounting complaints about the way Paris intends to implement the EU's electricity directive - because France's proposed legislation is not yet law.

Dutch Finance Minister Annemarie Jorritsma has already asked the Commission's Directorate-Generals for energy (DGXVII) and competition (DGIV) to look into the case, and is now demanding that Union energy ministers hold an urgent debate on the issue at their next meeting on 11 May. She claims that, in its current form, the proposed French legislation designed to transpose the EU measures into national law is illegal.

Her complaint centres on a clause in the draft legislation which states that large enterprises will have to sign energy contracts lasting at least three years during the initial stages of the liberalisation process.

The Dutch minister says this proviso runs counter to the new EU rules, which clearly state that major power consumers have the right to 'shop around' for their electricity.

EU officials claim that the Commission is “very anxious” about the content of the current draft of the French law. But staff within the institution argue that until the contested legislation has been definitively adopted by both houses of the French parliament, there is little that can be done about their concerns.

Not everyone agrees with this argument, however. Some critics point out that the Commission could begin infringement proceedings against France now if it wanted to.

They say the deadline for EU governments to transpose the Union-level rules has already passed - all members states should have implemented them by 19 February this year - and yet, at present, the appropriate legislation is not on French statute books.

The French Senat is still in the process of debating the text and most observers say a final version of the new law is unlikely to be agreed before the autumn.

But sources close to the Commission say that the institution is reluctant to take action now simply over the question of France's failure to complete the necessary parliamentary procedures on time.

Officials argue that Paris is at least in the process of agreeing a new law and also point out that France is not the only EU country to have overshot the deadline.

The French themselves say Jorritsma's comments about their as-yet unapproved law are somewhat premature. They suggest that between now and the time the text is finally agreed, it is perfectly possible that amendments could be adopted which would answer the Dutch finance minister's criticisms. “We will have to wait until the law is approved. Until then, who knows what changes will be made?” said one French diplomat.

But it is by no means certain that the draft text will be significantly modified before it finally becomes law.

Liberalisation of the national electricity market is a highly controversial issue in France and the present version of the planned legislation was only agreed by the country's first house of parliament, the Assemblée Nationale, after several months of contentious debate.

It is questionable whether changes to the text of the sort demanded by Jorritsma would stand the test of further parliamentary scrutiny. State-owned electricity and gas company EDF-GDF is one of France's biggest employers and the country's powerful trade unions are currently waging a concerted campaign against the moves to open it up to competition.

The unions, backed by Communists in the government coalition, argue that the liberalisation process will inevitably lead to job losses in the energy sector.

They cite a study carried out by the European Federation of Public Service Unions (EPSU) which shows a quarter of a million jobs have been lost in Europe's electricity sector since preparations for liberalisation began in 1990. The EPSU predicts a further quarter of a million posts will go in the next five years.