French still seeking compromise over gas under Luxembourg presidency

Date: 30/10/1997

FRANCE is hoping for a deal on how to open up Europe's gas supply and distribution markets by the end of the year, if only to avoid the issue falling into the hands of the UK's Union presidency.

Paris is warning, however, that it will not accept an unsatisfactory deal simply to avoid a delay beyond the end of Luxembourg's term at the EU helm. “We do not want to block a deal. We want an agreement but not at any price,” said a French official.

The French government claims it will be able to call on powerful allies to block an agreement being imposed upon it if the Grand Duchy carries out its threat to put the market-opening package to a ministerial vote in December.

“The Belgians, Italians, Austrians and, on some issues, the Danes are on our side on this,” said the official, who added that there was less chance of finding a compromise if the gas dossier was transferred into British hands. “They are not best placed to make progress,” he said.

London is an advocate of a wide-ranging and deep market opening modelled as far as possible on its already advanced national framework for gas competition. Its demands across a whole raft of issues from the breadth of market opening to the separation of accounts for gas companies have only succeeded so far in annoying France.

Luxembourg's proposals faltered at a meeting of energy ministers this week on the question of how much of the gas market should be initially prised open to enable large users to shop around for supplies. France still insists that opening more than 15&percent; of the market is unacceptable, while Luxembourg wants at least 28&percent; and the European Commission is rejecting anything below 23&percent;.

“It is clear that the 28&percent; figure will have to change,” said the French official, adding that give and take on a series of outstanding issues could make a compromise possible.