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Nine EU states oppose split of energy producers and distributors

One-third of the 27-member European Union is opposed to forcing energy suppliers to spin off their distribution networks, the French ministry of ecology and sustainable development said Tuesday.

Nine member states have written to the European Commission „to express their opposition to a split between gas and electricity production, commercialization and transport networks,” a ministry statement said. „The separation of ownership between network managers and energy suppliers supported by the European Commission has not proven itself,” a letter signed by the nine countries maintained.

EU Competition Commissioner Neelie Kroes, backed by other member states such as Britain, Spain and Sweden, seeks to „unbundle” energy production and supply in an attempt to increase competition. The Commission - the EU's executive arm - is currently considering plans to reform the sector and is due to make its proposals later this year. But EU heavyweights France and Germany are concerned that their major energy groups such as EDF and E.ON would be seriously weakened by such a move.

French electricity utility EDF and German energy giant E.ON control both the production and supply networks in their domestic markets. On Monday, Ecology Minister Jean-Louis Borloo was quoted by the Financial Times Deutscheland as saying: „The idea that only the complete separation of production and distribution can pave the way to the development of the EU's electricity and gas market must be rebutted.”

According to his ministry, France and Germany are joined by Austria, Bulgaria, Cyprus, Greece, Latvia, Luxembourg and Slovakia in stressing that „reinforced and harmonized regulation in Europe constitutes an effective response to current market dysfunctions.” (