92001E1680

WRITTEN QUESTION E-1680/01

by Benedetto Della Vedova (TDI) to the Commission

(14 June 2001)

Subject: Acquisition by EDF of a stake in Montedison SpA

According to press reports, Electricité de France (EDF) has recently acquired a 3,97 % stake of Montedison SpA's capital.

EDF, which is the world leader in the production of electrical energy (the company has 18 % of the European electricity market and aims to have secured 50 % of the market by 2005), is entirely controlled by the French government and operates on French territory as a monopoly.

France has consistently ignored the European directive that requires EU Member States to open up their national electricity and gas markets, while the Commission has responded by opening the infringement procedure and requesting France to comply with Community law. The electricity market has been opened up to a far lesser extent in France than in most other countries of the Union and this will continue to be the case for many years to come. France's halting progress in comparison to the liberalisation under way in other countries has enabled the EDF to use the resources derived from its monopoly position to support its aggressive policy of expansion in the European market.

The argument that the acquisition of the holding in question should be regarded as a purely financial investment lacks credibility given the obvious connection between the sectors in which EDF and Montedison operate and the former company's strategic interest in gaining a foothold in the Italian market in the generation and distribution of electrical energy, which is in the process of being liberalised.

In view of the foregoing, would the Commission state what steps it intends to take in respect of EDF to ensure that the monopoly position the latter enjoys does not continue to adversely affect competition in the electrical energy sector? Would the Commission also state whether it agrees that, in view of the fact that the French national market continues to be dominated by a monopoly, the situation described above indirectly constitutes the granting of state aid to the EDF, which is incompatible with Article 87 of the EC Treaty and infringes Article 82 of the Treaty by effectively exporting to the Italian market the dominant position which EDF occupies in France?

Answer given by Mr Monti on behalf of the Commission

(3 September 2001)

In line with the conclusions of the Stockholm European Council (23 and 24 March 2001) agreed by the Heads of State and Government, the Commission will ensure that the provisions of the EC Treaty are fully observed in the electricity sector during the process of liberalisation and that those companies which still benefit from a monopoly situation on their national market do not unduly benefit from that situation.

The matter to which the Honourable Member refers, the acquisition by Electricité de France (EdF) of a stake in Montedison SpA, has taken on a new dimension since, after acquiring 20 % of the capital of Montedison SpA, EdF went on to create a joint venture, Italenergia, in association with other Italian firms. That undertaking has just made a takeover bid for Montedison. The current shareholders in Italenergia are FIAT, EdF, Tassara and three Italian banks (Banca di Roma, San Paolo and Intesa). The Commission is now carefully assessing the latest operation, which was notified on 26 July 2001 pursuant to Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings(1). After Italenergia's shareholding structure was amended, the Commission came to the conclusion, on 20 July, that this was indeed a concentration with a Community dimension and accordingly invited Italenergia and FIAT to submit appropriate notification. The Commission will, in addition, continue to monitor developments very closely to assess whether there are grounds for Articles 81 (ex Article 85) and 82 (ex Article 86) of the EC Treaty to be applied.

As for the Honourable Member's suggestion that EdF received aid from the French Government incompatible with the EC Treaty, the Commission is currently examining the provisions of French regulations which govern EdF's area of activity in order to determine whether these provisions could be interpreted as state aid. Among other aspects, the relationship between EdF and the State as a shareholder will be examined with reference to the market investor principle.

The Commission considers, moreover, that the most effective way of resolving the problems relating to imbalances in the progress of liberalisation in the various Member States pinpointed by the Honourable Member is to adopt the draft electricity liberalisation directive, which is more far-reaching than those approved by the Council and the European Parliament in 1996 and 1998 and forms part of a package of measures announced on 20 June 2000 aimed at ensuring the full application of competition rules in the energy sector.

(1) OJ L 257, 21.9.1990.