EU to protect Paris' share in gas privatisation

8th September 2006, Comments 0 comments

PARIS, Sept 8, 2006 (AFP) - The European Commission will allow France to retain a so-called "golden share" protecting state influence in the privatisation of Gaz de France, the Financial Times newspaper reported on Friday citing a letter from the commission.

PARIS, Sept 8, 2006 (AFP) - The European Commission will allow France to retain a so-called "golden share" protecting state influence in the privatisation of Gaz de France, the Financial Times newspaper reported on Friday citing a letter from the commission.

France wants the right to such a share, amounting to a veto on key strategic moves, under its highly controversial scheme for GDF to be absorbed by Suez, a bigger private French energy group.

In May the commission had ruled out the possibility of such a golden share.

The French National Assembly began debate on the plan on Thursday, and the FT reported that late on Wednesday EU Internal Market Commissioner Charlie McCreevy had written to French Economy and Finance Minister Thierry Breton saying that the commission would not oppose the golden share.

However, the commissioner did stress that such golden shares put obstacles in the way of foreign investors and ran counter to the principle of the EU internal market.

Provided that the French government did not try to extend its influence over the proposed GDF-Suez entity further, the commission would not launch an infringement procedure, the commissioner said.

The FT said that it had seen a copy of the letter.

The plan to privatise GDF by putting it under the wing of Suez has provoked a mountain of wrecking amendments by opposition left-wing parties in France.

It is also opposed by trades unions on the grounds that it would dilute the government's ability to restrain price increases for consumers of energy and would also lay the GDF's energy assets open eventually to acquisition by foreign interests.

The principle of a golden share, used during the early days of privatisation in Britain for example, is intended to provide the state with specific powers, for a period at least, to ensure that private owners do not take decisions counter to national strategic interests.

One of the controversial aspects of the GDF-Suez plan at European level is that it was seen by some as a protectionist move by France to ward of takeover interest in Suez from Italian group Enel.

In Brussels, the commission's policy is to encourage consolidation of the European energy sector through competitive market forces, subject to anti-trust law, and to discourage deals organised by governments in the national interest.

Copyright AFP

Subject: French news

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