By an OGJ Online Correspondent
PARIS, June 20 -- The European Commission Wednesday will examine a report by Energy Commissioner Loyola de Palacio and Competition Commissioner Mario Monti restating that deregulation of the continent's gas and electricity markets is not advancing in all countries at the same rate and in the same proportions, leading to "serious competition distortions" among European companies.
The move does not explicitly target France's Electricité de France SA and Gaz de France SA, but these two companies have only opened their monopolistic home markets by 30% and 20%, respectively.
"In the countries which have limited the opening up of their markets to the strict minimum, companies retain a large base of captive clients which ensures them a minimum level of revenues and a real advantage outside their frontiers," de Palacio and Monti said in the joint document, adding "consolidation of the sector must not rest on companies protected on their own markets."
The commissioners suggest that countries that opposed the full opening of the market during the European Union Stockholm summit 3 months ago should now accept the Jan. 1, 2005 deadline.
Failing this, the commissioners said, the EC would have recourse to Article 86 of the EU Treaty, which states that EU countries "can take no measures in favor of their public corporations, or those benefiting from special or exclusive rights. These corporations cannot, also, use these advantages to limit trade development."
The EC could use this clause to force France, and also Germany -- the two member states which did not meet the EU gas directive's Aug. 10 deadline last year for deregulation -- to more fully open their energy markets.
The French government, which maintains that EdF has been "playing the liberalization game appropriately," could take its case to the European Court of Justice, a move that could delay resolution of the issue for several years.
