EU Competition Policy Lies In Tatters
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EU Competition Policy in Disarray
Overview
The U.K. strictly adheres to EU competition rules, promoting open markets for foreign ownership of utilities. Yet, some EU member states seem to manipulate these rules for national interests, raising questions of fairness.
Background
The U.K.’s commitment to EU competition guidelines has led to foreign ownership dominating its utility sector. Currently, only two major British-owned energy suppliers, Centrica and Scottish and Southern Energy, remain amidst takeover speculations.
The European Disparity
While the EU champions open and integrated markets, practices across member states tell a different story. European Competition Commissioner Neelie Kroes called for dismantling large European utilities to foster competition. However, her proposal was softened under pressure from the French and German governments.
In contrast, Spain has selectively applied these rules. Spanish company Iberdrola easily acquired Scottish Power, but when German company Eon attempted to buy Endesa, Spain intervened with protectionist measures. Despite EU findings against Spain's unfair conditions, Spanish company Acciona, along with Italy's Enel, outmaneuvered Eon. Enel also faces new national restrictions in Spain, complicating its plans.
Industry Reactions
Graham Paul from electricity4business Ltd, a British electricity supplier, questions why countries like Germany, France, and Spain, despite being more pro-EU than the U.K., still resort to protectionism to guard their national suppliers. He advocates for a "level playing field," emphasizing that the collective benefits of open markets outweigh national sacrifices. Opening up these markets could, for instance, break the longstanding link between gas and oil prices, enhancing European competitiveness globally.
Broader Implications
Spain’s aggressive acquisitions in other sectors, such as the Abbey National and BAA in the U.K., are partly driven by appealing tax incentives unavailable to other EU nations.
This trend of concentration in mainland Europe forces displaced companies to look elsewhere for expansion, often targeting the open U.K. market. With only two major domestic energy companies left, some analysts predict that, after its aborted bids for Scottish Power and Endesa, Eon might now target Scottish and Southern Energy, potentially leaving even fewer British-owned options.
Conclusion
The situation highlights inconsistencies in EU competition policy implementation, sparking debate over fairness and market openness. As the U.K. faces increased foreign interest, the need for equitable enforcement of EU competition rules becomes crucial.
You can find the original non-AI version of this article here: EU Competition Policy Lies In Tatters.
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