EU power market to be liberalized

European Union energy ministers agreed Nov. 25 to completely liberalize EU electricity and gas markets over the next five years.

France agreed to extend the market opening from industrial users to private consumers by July 2007, Deputy Industry Minister Nicole Fontaine said.

"I believe I am able to say that we have reached an agreement acceptable to all the member states, including France," she told reporters.

France had been the main stumbling block to an accord.

The European Commission, the EU's executive arm, wanted the household gas and electricity sector to be opened to competition by 2005, a target that Paris said was much too soon.

Liberalization of the EU electricity and gas markets for commercial users is planned for 2004.

Fontaine had said that state-controlled giants Electricite de France and Gaz de France would need until 2007-2009 to prepare for the opening of the household market to outside competition as well.

The agreement on the 2004 deadline for the opening of energy markets for industrial and business users was agreed in principle by EU leaders at a March summit in Barcelona.

France agreed to that date only after winning concessions on reform of railway freight arrangements.

France has come under strong pressure over energy liberalization because Elecricite de France and Gaz de France have been aggressive in expanding into deregulated EU markets while benefiting from protection at home.

The debate is particularly sensitive in France because trade unions bitterly oppose the planned deregulation.

French Prime Minister Jean-Pierre Raffarin in July said that EDF and GDF would be partly privatized. But the unions are deeply suspicious of any changes that could see staff at the two utilities lose their protected status as civil servants.