Brussels takes legal action over protectionism

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No fewer than 17 EU countries were hit with legal action yesterday as the European Commission launched a frontal assault on protectionism in European energy markets, promising to cut energy bills.

France, Germany, Italy and Spain were all accused of protecting big utility firms and failing to push through liberalisation which could save consumers millions of euros.

Yesterday's initiative underlined the distance Europe needs to travel to achieve its goal of completing the single energy market next year. Although directives on market opening were agreed in 2002, problems include regulated prices, obstacles for new market entrants, insufficient separation between electricity and gas transmission and distribution system operators and preferential contracts for long-standing electricity or gas suppliers.

The offensive coincided with the launch of separate proceedings against France over a decree adopted in the name of "economic patriotism" to restrict foreign shareholdings in 11 so-called "strategic sectors".

Andris Piebalgs, the European Commissioner responsible for the sector, said member states had "an interest" in reform "because they have promised to their citizens that competition will provide the best prices". Eleven nations are accused of failing to "unbundle" transmission and distribution systems, restricting the possibility of access to new firms.

The UK faces a technical infringement case over the contract for the interconnector between Northern Ireland and Great Britain. But Alan Johnson, the Trade and Industry Secretary, described the move as a "solid kick back against the spectre of protectionism".