21st Mar 2018

Germany highly critical of EU energy package

  • "Tough, long and difficult" negotiations are expected (Photo: EUobserver)

The European Commission president has thrown his weight behind a sweeping reform of the EU energy market, which ultimately should see the break-up of the bloc's energy giants.

"The commission is clear that the status quo cannot continue...Without change, distortion of competition and fragmentation of the market will continue", Jose Manuel Barroso said on Wednesday (19 September), after the commission gave the green light to the package.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

Mr Barroso has also urged the EU capitals as well as European lawmakers "to move quickly to agree these proposals", arguing "EU citizens have every right to expect that we act to energize Europe".

Brussels has clearly spelled out its preference for full ownership unbundling, requiring a company to split its production and transmission wings.

"This is by far the most effective approach", the commission chief said, adding an increasing number of member states are already going down this route.

This could be achieved in two ways – companies may either sell their transmission networks to an independent investor or form new separate business through a shares split.

Dismissed by Germany

Although Mr Barroso anticipated that the negotiations on package will be "tough, long and difficult", Germany's reaction was unusually critical of the proposals.

German economy minister Michael Glos said "the high quality and security of German electrical power networks should not be put in danger."

"The package is all in all too bureaucratic and leads to a high regulatory burden."

Germany "strictly rejects" ownership unbundling, said Mr Glos adding that he is "very sceptical whether through the focus of the commission on ownership unbundling, a way for more competition is found."

"The contrary is more likely," he stated. Germany, along with France, had been the strongest opponents of the unbundling option in the run up to the publication of the proposals.

'Gazprom clause'

The commission also received criticism from elsewhere – albeit more veiled – for another part of the proposal on protecting the EU energy market.

Reacting to Brussels' energy package, Russian state-owned energy giant Gazprom indicated it would present its evaluation of the way these measures will affect security of supply, the competitiveness of European energy markets as well as energy prices in Europe.

"Gazprom has an important contribution to make to the debate about regulation of the energy sector in Europe and feels certain that its voice will be heard", the company's Sergei Kupriyanov said in a written statement.

He has also rushed to remind Europe that "Gazprom is a reliable gas supplier to the European Union and a major investor in the infrastructure which brings gas to Europe".

Under the proposed restrictive rules, foreign buyers who wish to purchase an EU network will have to follow the same unbundling requirements as the union's own firms.

In practice, third countries as well as their individuals should not be able to acquire control over an EU transmission network unless there is agreement between the EU bloc and the companies' country of origin.

However, Mr Barroso has refused to label the safeguards as protectionism – or the Gazprom clause as it has quickly become known.

"This is about fairness; it is about protecting fair competition. It is not about protectionism", he said.

A quarter of the bloc's gas as well as quarter of its oil originates from Russia.

Despite the expected difficulty of the negotiations, the European Commission believes an agreement could be thrashed out under France's six-month EU presidency, starting in July 2008 – with Mr Barroso firmly putting the ball in member states' court.

"Today we put everyone before their responsibilities. If the results are lacking it will not be because of a lack of ambition on the part of the commission", he concluded.

Brussels to announce EU energy sector shake-up

Despite a lack of political appetite in several EU states, the European Commission is set to push ahead with the furthest-reaching reform of the bloc's energy sector yet.

The package includes the forced break-up of Europe's energy giants as well as a protective shield against countries such as Russia.

Merkel in Paris for eurozone reform talks

Angela Merkel - who started her fourth term as Germany's chancellor earlier this week - is wasting no time on big issues like eurozone reforms. On Friday she is meeting Emmanuel Macron where the two will seek common ground.

EU insists on US tariffs exemption

Europe is "an ally, not a threat", the EU Commission says - as the US is poised to impose duties in steel and aluminium. Common action on Chinese steel overcapacity could help diffuse the crisis.

Trump starts countdown to EU trade war

EU sales of steel to US to face 25 percent tariff from 23 March, with Europe to hit back on motorbikes and bourbon in looming trade war.

VW dismisses complaints on Dieselgate fix

'I think customers who want to get information (...) are able to receive information if they want," VW management board member Hiltrud Werner told EUobserver. Consumer groups disagree.

News in Brief

  1. Separatist activist renounces Catalonia leadership candidacy
  2. EU puts conditions on Bayer-Monsanto merger
  3. Hard Brexit would hit poorer Irish households hardest
  4. Finland hosts secretive North Korean talks
  5. EU to unveil 3% tax on digital giants
  6. German elected S&D leader in European Parliament
  7. Germany: nearly €350m child benefit goes abroad
  8. Norway's far-right doubles support as minister resigns

Stakeholders' Highlights

  1. EUobserverStart a Career in EU Media. Apply Now to Become Our Next Sales Associate
  2. EUobserverHiring - Finance Officer With Accounting Degree or Experience - Apply Now!
  3. ECR GroupAn Opportunity to Help Shape a Better Future for Europe
  4. Counter BalanceControversial Turkish Azerbaijani Gas Pipeline Gets Major EU Loan
  5. World VisionSyria’s Children ‘At Risk of Never Fully Recovering', New Study Finds
  6. Macedonian Human Rights MovementMeets with US Congress Member to Denounce Anti-Macedonian Name Negotiations
  7. Martens CentreEuropean Defence Union: Time to Aim High?
  8. UNESDAWatch UNESDA’s President Toast Its 60th Anniversary Year
  9. AJC Transatlantic InstituteAJC Condemns MEP Ana Gomes’s Anti-Semitic Remark, Calls for Disciplinary Action
  10. EPSUEU Commissioners Deny 9.8 Million Workers Legal Minimum Standards on Information Rights
  11. ACCAAppropriate Risk Management is Crucial for Effective Strategic Leadership
  12. EPSUWill the Circular Economy be an Economy With no Workers?

Latest News

  1. Judicial reforms 'restore balance', Poland tells EU
  2. Whistleblower fears for life as US arrest Malta bank chair
  3. Behind the scenes at Monday's EU talks on Russia
  4. US yet to push on Nord Stream 2 sanctions
  5. EU mulls coercion to get refugee kids' fingerprints
  6. Five east European states prevent new CAP consensus
  7. EU to probe UK 'election-rigging' firm
  8. 'Denial' - is meat the new climate change?

Stakeholders' Highlights

  1. European Jewish CongressThe 2018 European Medal of Tolerance Goes to Prince Albert II of Monaco
  2. FiscalNoteGlobal Policy Trends: What to Watch in 2018
  3. Human Rights and Democracy NetworkPromoting Human Rights and Democracy in the Next Eu Multiannual Financial Framework
  4. Mission of China to the EUDigital Cooperation a Priority for China-EU Relations
  5. ECTACompetition must prevail in the quest for telecoms investment
  6. European Friends of ArmeniaTaking Stock of 30 Years of EU Policy on the Nagorno-Karabakh Conflict: How Can the EU Contribute to Peace?
  7. ILGA EuropeCongratulations Finland!
  8. UNICEFCyclone Season Looms Over 720,000 Rohingya Children in Myanmar & Bangladesh
  9. European Gaming & Betting AssociationEU Court: EU Commission Correct to Issue Guidelines for Online Gambling Services
  10. Mission of China to the EUChina Hopes for More Exchanges With Nordic, Baltic Countries
  11. Macedonian Human Rights MovementCondemns Facebook for Actively Promoting Anti-Macedonian Racism
  12. Nordic Council of MinistersGlobal Seed Vault: Gene Banks Gather to Celebrate 1 Million Seed Collections