Contribution by Council Presidency. The indispensable creation of a genuine common European energy market is making progress, despite obstacles and differences. Sometimes we observe a certain confusion between internal and external aspects of the EU's energy policy. This can be explained by the historically multinational character of this sector, whose responsibility was largely left in the hands of the big companies (“the seven sisters” of yore) but this has now all changed since the countries owning the oilfields also control their management; further public sector consolidation is being seen everywhere. A European external policy does not exist in this domain. Some joint projects are emerging and the general characteristics are highlighted in meetings with several third countries (it was in the now historic EU/Russia meetings that Vladimir Putin clarified his rejection of the Energy Charter and where he laid out his conditions for Euro-Russian cooperation). At a bilateral level, however, and almost always without coordination, member states are making difficult decisions on issues like the opening up of their national market to Gazprom or participation in the South Stream gas pipeline.
Following Javier Solana's appeal to member states to at least inform each other about their negotiations with different countries (see this column in EUROPE 9601), a “working note” from the Council Presidency arrived focusing on the contribution of trade policy to energy security. Our readers will be aware of it because our journalist Emmanuel Hagry managed to get hold of a copy and summarised it last week (EUROPE 9617). The Slovenian Presidency is certain that allowing third countries to participate in the distribution of energy products in the European internal market, all the way to the consumers, should be subordinated to the right of European firms to invest in the extraction and exploitation of energy reserves in these countries. Neither should a producer from a third country be able to take control of a distribution network in the EU (Gazprom wants to develop a significant stake in the Italian SNAM company and plants) unless there is a European agreement. This is all of great interest to the USA. Last week EUROPE (9609) indicated what the country thought, particularly its support for Nabucco and its reservations on South Stream.
Germany changes tack. While waiting for member states to recognise the need for a European foreign policy on energy, the Commission is actively ensuring completion of the internal market. Several striking developments should be underlined. The most spectacular (because it is the least expected) was the decision of the huge E.ON company in Germany to sell off its electricity grid (10,000 km of lines) to an operator that had no interest in producing or supplying electricity. The unbundling that Germany, France and other member states are opposing at a political level, will in fact happen on the biggest market of all. French and German ministers at the Energy Council declared that the E.ON decision did not mean that their opposition to unbundling had ceased at all and they reaffirmed their support for the compromise formula that allows integrated groups to continue with the dual activities of production and distribution under the control of a regulator, whose powers will be reinforced. It is, however, obvious that the German group's decision (which was apparently afraid of Commission sanctions for previous irregularities) strengthens the position of the European Commission and member states that consider unbundling as the only effective way of introducing real competition into the energy market to the benefit of consumers and investment (see overview in EUROPE 9613). Nevertheless, nothing is in the bag yet and a lot of manoeuvring (hostile or friendly takeover bids, alliances with or without the support of the public authorities, etc) is still going on.
At the same time, the general debate on the energy/climate package has opened at a ministerial and European Parliament level. This allows each country to denounce the imbalances of which it believes it is a victim. Every country says that, compared to its neighbour, it is being asked to make a greater effort and they all believe that they are in the right. The Commission strove to operate a balanced synthesis and a number of months will be required to reach the crucial compromises. A whole plethora of actions for saving the environment and climate, without hampering the economy, is on the table; the debate has only just begun.
(F.R.)