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Tuesday, 12 June, 2001, 16:19 GMT 17:19 UK
French energy under EU spotlight
Power plant
EdF has expanded rapidly into neighbouring power markets
The European Commission is scrutinising France's state-owned power company EdF to see if it should launch a full investigation into alleged anti-competitive practices.

"The Commission is looking to see if its suspicions translate into a formal investigation," said competition spokeswoman Amelia Torres.

EdF has been at the centre of hostility from both the German and Italian governments in the past few weeks.

The French firm has an aggressive programme of expansion into European energy markets and the EU could chose to assess whether state aid has buoyed EdF on its acquisition trail.

Unfair treatment

Neighbouring countries are also angered by the fact that it is notoriously difficult to gain a foothold in the French electricity market.

German economy minister Werner Mueller threatened on Monday to prevent the French state-owned power giant EdF from importing electricity into Germany so long as France does not open up its power markets to foreign companies.

Germany's decision came after a meeting with Europe's biggest utility E.ON which has recently bought the UK's Powergen.

All EU countries are bound to open up their energy markets to third party competition, but France has been dragging its feet in passing the new laws for the deregulation of the industry.

Under the EU reciprocity law, Germany is entitled to treat French energy firms in the same way as its own companies are treated in France.

Italy's disdain

A recent expansion into Italy also sparked a row, when the French firm increased its stake in Italy's Montedison to 20%.

The Italian government has quickly introduced measures designed to block further takeovers.

Italy's treasury Minister Vincenzo Visco declared it "unacceptable to let a player with a rigged hand of cards join the game".

EdF has also pushed its way into the UK electricity market through its subsidiaries London Electricity and Sweb (the former southwestern electricity board) and by buying a 25% stake in Virgin Energy.

France's reluctance to open its energy markets to competition has already been heavily criticised by the European Commission.

The Commission is in the process of taking Gaz de France to court for refusing to open up the market in line with the EU Gas Directive.

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See also:

06 Jun 01 | Business
When takeovers become personal
10 Apr 01 | Business
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