A European
energy market
Mar 14, 2006 - International Herald Tribune
It bears recalling at times that the precursor to the European Union
was the European Coal and Steel Community, which was set up in 1951 to
reduce the possibility of another continental war by putting a strategic
industry under joint control. The European Union is now pushing to do
something similar with energy supplies. The threat is no longer war
among EU members, of course, but rather the broader notion of "energy
security." Europe imports half its energy, and that will soon rise to 70
percent. At the same time, global demand for energy is growing
exponentially, and the sources are not always in savory hands.
The European Commission, led by Jose Manuel Barroso, correctly
declared last week that there must be a unified European response and a
single European energy market.
That means, first of all, that France and Spain must abandon the
argument that energy is a strategic national interest that must not be
ceded to Brussels. This is simply an excuse for raw protectionism. As
Barroso argued on these pages last week (IHT, March 8), the energy
challenge is common to all European countries, and a unified market
would give Europe immeasurably greater leverage in dealing with
suppliers. Put bluntly, would Russia, which supplies a quarter of
Europe's gas and oil, play chicken with an entity that contributed more
than 40 percent of the Kremlin's federal budget, the way it did with an
isolated Ukraine?
The question must be put, first of all, to France. Prime Minister
Dominique de Villepin has gained an image as Europe's protectionist-
in-chief for trying to protect the utility Suez from an Italian
takeover. The ploy was a merger with the state-own Gaz de France. That
move follows official efforts to preserve French ownership in
pharmaceuticals, steel and even yogurt. Unfortunately for Villepin, the
misguided defense of French honor at least in the Suez affair was
spurned by the labor unions, which fear that any partial privatization
of GDF would cost them cushy state-backed jobs. The greater irony is
that France ranks near the top of the EU in investments by foreign
companies, and Villepin's antics may scare off foreign investors.
But France is not alone. Spain, too, has thrown up barricades against
a takeover of its leading energy company, Endesa, by the German giant
E.ON.
The European Union has taken a battering of late, and it is easy
these days for national politicians to play to the crowds with phony
invocations of national security. But cutting the European Commission
out of an issue as central to Europe as energy would undermine the very
reason for the existence of the EU. When energy ministers meet later
this month, they would do well to recall that the French founders of the
first European common market believed their national security was best
served by putting key industries under collective control.
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