Brussels prepares legal sanctions as France stalls on energy liberalisation

THE FRENCH, already under fire for their refusal to lift the ban on British beef, face further sanctions from the European Commission next week over their failure to open the country's energy markets to competition.

France is also threatened with retaliation from other member states in the European Union, although it is thought that Britain will leave it to the European Commission to punish the French. Helen Liddell, the Minister for Energy and Competitiveness in Europe, said: "The French say they believe in a single European market. They must learn to live with the consequences."

Brussels intends to start legal proceedings against France next Wednesday after the French parliament delayed a crucial vote to liberalise its power market

The vote means that France will miss an EU deadline to open up 26 per cent of its electricity market to outside suppliers by the end of the year and will not take any liberalisation measures until next year.

The delay is likely to result in retaliation against the state-owned French power producer Electricite de France from Spain, Italy, Germany and, potentially, the UK.

A spokesman for EdF, which also owns London Electricity and the supply arm of Sweb in the UK, said parliament's failure to agree the energy bill had posed "serious problems" for it.

Spain and Italy have both threatened to close their markets to EdF and the Germans may block its purchase of a 25 per cent stake in Germany's fourth-largest utility, Energie Baden-Wuerttemberg.

The necessary French legislation is not now likely to be passed until February next year - a year after the original deadline for market liberalisation.

The UK's Electricity Association said it was disappointed by the further delays. "France will now be at least a year late in meeting the very modest requirements of the Electricity Directive. Even then, further measures will be needed to create a regulator and establish an independent system operator, so, in reality, little progress is likely before the end of 2000."