German Chancellor Angela Merkel said opening Europe's electricity and natural-gas market to more competition would be „very difficult” and promised to compromise to facilitate an accord.
European Union regulators want to break up energy companies such as E.ON AG into separate production and transmission businesses to make networks accessible to companies without their own grids. Germany and France oppose the idea, which EU leaders will discuss at a March 8-9 summit. „We are going to have some very difficult discussions on the strengthening of our internal market to ensure it is more competitive,” Merkel told the European Parliament today in Strasbourg, France.
„Germany is going to have to accept compromises, which will not be easy.” The European Commission is stepping up efforts to open the EU's €250 billion ($325 billion) power and gas market because national barriers persist after 2003 legislation gave customers the right to choose suppliers. The lingering obstacles threaten to increase prices, curtail supply and weaken the economy of the 27-nation bloc.
The new push by the commission, the EU's regulatory arm in Brussels, follows Spanish efforts to thwart a takeover of Endesa SA by E.ON and a French-orchestrated merger of Suez SA and Gaz de France SA to avert a possible bid for Suez by Italy's Enel SpA.
Merkel's government, which holds the EU's six-month rotating presidency through June, faced criticism in the bloc earlier this year for fighting a separate commission plan to cap carbon dioxide emissions from cars and creating the impression the country would use the presidency to defend national interests rather than promote European proposals.
Today, Merkel pledged to help advance the energy market-opening plan, saying „it would be an error if we were to continue pursuing our own interests.” The commission will present draft legislation to split energy production and transmission after EU governments debate the matter. A draft law would need the backing of EU governments and the Parliament. The commission says the breakup of companies into separate production and transmissions businesses - known as „ownership unbundling” - is the best way forward.
Last month, the commission outlined an alternative, less far-reaching approach that would allow production companies to remain the owner of transmission businesses while no longer being responsible for the units' operation, maintenance or development. (Bloomberg)