Kroes warns against protectionism in EU energy markets

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Artificially created national champions may have short-term appeal but are often to the long-term detriment of European consumers and competitiveness, the EU’s competition commissioner has said.

Neelie Kroes took a determined stance against the “perceived challenge” of protectionism in European energy markets in Cernobbia, Italy, where she was speaking at an economic forum on 2 September.

Cross-border mergers in the energy sector are on the up, the Commissioner said, with a 75% rise between 2000 and 2005. In 2006, the number of cases brought to the attention of the Commission has already surpassed that of the previous year, she pointed out, describing this as “a welcome development”.

“Cross-border mergers tend to be better for customers…than mergers between national players that would otherwise compete in the same national markets,” she explained.

But she guarded against protectionist tendencies in “a small number of well-publicised instances” such as the E.ON/Endesa and Suez/GDF cases.

“Let’s not allow ourselves to be side tracked by the out-dated rhetoric of protectionism,” Kroes warned. “Artificially created national champions may have short-term appeal but this is often to the long-term detriment of European competitiveness and European consumers.”

“I’m all for champions – European champions,” she added.

The final report on the energy sector inquiry will be published in early 2007, along with the report on progress in the liberalisation of the energy sector, Kroes indicated. They will include “the question of the possible need for new regulation in this area”, she said.

Read this article in Czech  (EURACTIV.cz) and Polish  (Rzeczpospolita).

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