(3 February, 2009, Brussels) The decision of the European Commission to launch an investigation into energy markets due to high consumer dissatisfaction (2 February) is a “stunning denial of their own role in causing this mess”, according to EPSU Deputy General Secretary Jan Willem Goudriaan. He added that it is: “precisely the Commission liberalisation of the energy market which has lead to massive concentration of ownership, and high prices for private and business users”.

He commented that: “the audacity of Commissioner Meglena Kuneva in launching this study is breathtaking. To present the Commission as some kind of ‘consumer champion’, flies in the face of 10 years of evidence which puts the blame squarely at the Commission’s own door”.

EPSU have commissioned research, published today, which illustrates the Commission’s own responsibility for the strains on the EU energy sector. The study shows that since the opening of the market, the grip of the largest companies on consumers and industrial users has only grown. The study urges polices that to strengthen the protection of users and especially low-income households, a recommendation echoed by the European Parliament

Mr. Goudriaan cited the example of failed US energy company Enron, which surfed the waves of deregulation and greed only to belly-flop spectacularly. Ultimately, its demise heralded the current global financial crisis. “Unless the Commission recognizes that a just EU energy policy means fair regulation not less regulation, we are doomed to repeat the same mistakes”.

Past scores for customer satisfaction with the electricity and gas companies were extremely high when still publicly owned and operating in a national context. The Commission’s own horizontal evaluation of services of general interest indicated there were no problems. The need for this ‘investigation’ is tantamount to a Commission admission that its experiment of free markets deteriorates the efficiency of service, raises the price and lowers quality.

For further information, please contact:

Jan Willem Goudriaan, +32 2 2501080 or by email: epsu@epsu.org

The report was produced by Professor of energy policy Steve Thomas, Public Services International Research Unit (PSIRU) of the University of Greenwich (www.psiru.org).

High lights of the report:

 The trend towards concentration noted in earlier reports, is confirmed. The dominant 7 brothers E.On, EDF and RWE, Vattenfall, Gdf-Suez, Iberdrola and ENEL maintained or strengthened their positions.
 The European Union’s policy to force the integrated companies to sell their transmission networks may, far from increasing competition as it was designed to do, reduce it further. The proceeds from selling these networks will be used to buy up more assets in Europe in the competitive activities in energy.
 Without strong backing from government, the major national companies will struggle to survive as independent companies as the major companies continue to try to increase their grip over European energy markets. Some countries, such as Denmark, Luxembourg, Romania and Czech Republic do seem to be supporting the emergence of ‘national champions’ but this support can only be limited given EU competition law. In some of the countries where large numbers of companies still exist, such as Italy and Switzerland, mergers and takeovers are rapidly reducing the numbers of companies in the market.
 The major European international companies are increasingly focusing their investments in markets which connect physically with their core businesses. While the large companies maintain a watching brief in countries on the edge of the EU and which might join the EU, such as Turkey and Ukraine, they appear not to be seeking to expand their position until it is clearer that these countries will become integrated more fully into European markets.

 For the report

For further information, please contact: Brian Synnott +32 474 98 96 75, bsynnott@epsu.org

"EPSU is the European Federation of Public Service Unions. It is the largest federation of the ETUC. 8 million public service workers from over 200 trade unions are members. They organise workers in the energy, water and waste sectors, health and social services and local and national administration ".