Brussels, 20/06/2001 (Agence Europe) - After two hours of tough debating on the limits to cross-border investments and the asymmetry in the liberalisation of energy markets, the European Commission decided on Wednesday on strict implementation of existing legislation on "golden shares", competition and State aid in the energy sector. In addition, "in case of delays in the adoption of the directives on liberalisation that would create market distortions, the Commission agreed to consider itself adopting the directives or decisions, on the basis of Article 86.3 of the Treaty", a press release published on Wednesday stipulates, press release that was the subject of lengthy negotiations within the College. The cases of EDF taking a share in Montedison and EnBW in Hidrocantabrico were not mentioned in talks, the Commissioners for the Internal Market, Frits Bolkestein, and Competition, Mario Monti stated without batting an eyelid.
Regarding the internal market. "We pondered the need to change the current rules and the answer was no", Frits Bolkestein stated. The Commission set out, along restrictive lines, the principles defined in its 1997 reference communication on the liberalisation of capitals and freedom of establishment. In practice, it developed a "footnote" to this communication, stipulating that a Member State can only limit a private company taking a stake in a national company when that "State is in the process of privatizing the company and/or when that State is acting a majority shareholder" and when these conditions meet four criteria: 1) based on specific economic policy objectives and are clearly defined beforehand; 2) are applied without discrimination; 3) are limited to the time necessary to achieve the specific objectives, and 5) leave no margin for interpretation by the administration responsible.
A certain margin of interpretation is however left open, in the sense that the Commission also confirmed, the communiqué stipulates, that the public authority may no longer intervene in a company whose privatization is over, unless this intervention: 1) is justified by an interest defined by the EC Treaty, such as defence, public health or public order; 2) is justified by another overriding public interest; 3) does not discriminate between nationals of the Member state in question and nationals of other Member States, and ;4) is proportionate to that interest.
"In response to the request made by the European Parliament in March 2001, asking the Commission to present a directive on restrictions to cross-border investments, the Commission intends explaining to the EP that as guardian of the Treaties, it cannot create such exemptions through secondary legislation", the press release stipulates. In other words, exemptions will not apply to defensive measures adopted after the event by Italy and Spain to limit EDF and EnBW's entry into the capital of companies that are not in the process of being privatized, a Commission expert acknowledges, wanting to remain anonymous. "The cases of Montedison and Hidocantabrico must still be analyzed, it would be premature to decide" is all Commissioner Bolkestein would declare. He recalled that in the past, the Commission had agreed to limits to the entry into the capital of Aeroporti di Roma, precisely because the restrictions imposed by the Italian authorities corresponded to the criteria agreed to on Wednesday: known in advance, limited to 5 years, proportional. "The Commission has now to implement these rules on a case by case basis", a Commission expert noted.
Regarding the "asymmetric" liberalisation of the energy market, which places the less liberalised State monopoly companies in competition with companies from more liberalised markets, the Commission again wanted its proposals of last March , aimed at accelerating the liberalisation of the gas and electricity markets by 2005, to be rapidly adopted. Should this adoption take time (as can be expected given the opposition in Council), the Commission would consider using Articles 85 and 86 of the Treaty, to itself adopt a directive, like it did for the liberalisation of the telecommunications market. "Were there total market liberalisation, there would be no asymmetry or distortion to competition", stressed Commissioner de Palacio. Several Commissioners placed emphasis, it seems, on the distinctions to make between theoretical and actual liberalisation in Member States. "In theory, Germany has fully liberalised its market, in practice, only 2 to 4% of the market is open", remarked a Commission expert. Several Commissioners are also said to have stressed that these were inherent problems in all transitional periods, transitions for which Commissioner de Palacio would have liked specific measures.
In terms of competition policy, the political scope of the meeting was particularly important, as the Commission must remain the guardian of the Treaties while using the instruments at its disposal to push forward the completion of the single market, underlined Mario Monti. The Commission will ensure the avoiding of abuses of dominant positions, ensure access to networks and prevent the distributors limiting consumer choice. Its especially intends to carefully control State aids in the sector, including in the nuclear energy sector, insisted Commissioner Monti, when feeling that there exists a margin for manoeuvre, even if the Euratom Treaty does not foresee anything in terms of State aid. The issue of State aids has been, it seems, the object of long talks within the Commission. A distinction was notably made between investment aids, which are the object of a notification within the framework of Euratom, and operational aids, banned y the EC treaty. The Commission set out the rules concerning State aid, but without taking a decision, noted a Commission expert.