Energy liberalisation: Commission threatens Member States with legal action

Only two Member States have met the deadline of 1 July 2004 to implement EU legislation opening up the EU’s energy markets for commercial consumers. The Commission is not impressed.

The Commission has reacted strongly to the fact that only a
minority of EU Member States have transposed the EU gas and
electricity directives before the deadline of 1 July 2004. Two
Member States (Slovenia and the Netherlands) have notified the
Commission of their transposition of the legislation, and three
other countries (Denmark, Hungary and Lithuania) have adopted most
measures. The remaining twenty Member States, however, are not
likely to comply before the end of 2005. Some will not even make
that date.

"This situation is unacceptable," said a Commission spokesman.
"It is a legal obligation for all Member States to transpose the
directives. The Commission will now study the situation and decide
whether to launch infringement procedures against the countries
that have not implemented the legislation."

1 July 2004 was the deadline foreseen in the EU's new gas and
electricity directives to open up the European energy markets for
commercial customers. From that date, businesses across the EU,
which represent an average of seventy per cent of the energy
consumers, should be able to choose their power and gas suppliers
freely in a competitive market place. According to the directives,
which were adopted in June 2003, free choice of energy suppliers
for private costumers should follow in July 2007.

In order to create competitive and fair electricity and gas
markets, the directives stipulate that energy transmission networks
have to be run independently from the production and supply side.
Moreover, independent national regulators have to be appointed to
monitor market developments and prevent discrimination. In reality,
however, many European markets are still dominated by a limited
number of suppliers, thereby hampering competition. A level playing
field is far from being achieved.

Warning letters to national governments could be sent out to the
laggards as early as 7 July 2004.

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