Jun 6, 2008, 17:40 GMT
Luxembourg - European Union governments agreed Friday to let their big energy companies hold on to their power grids, but only as long as their production activities are clearly separated from their network operations.
The compromise solution reached in Luxembourg is designed to open up the bloc's energy markets to more competition while avoiding that European giants such as France's EDF have to be broken up.
However, key differences remain over the exact implementation of the measures, meaning diplomats will face further discussions in the coming weeks.
'Even though all member states cannot agree on all points of the package, the council (of ministers) has reached a broad agreement on the essential elements of the energy package,' the Slovenian presidency of the EU offered as way of a final compromise.
Friday's meeting had been portrayed as a make-or-break appointment, with governments being called to back plans put forward by the European Commission last year to force large companies that sell gas and electricity, such as France's EDF and Germany's E.ON, to relinquish control of the grids which distribute the energy - a process known as 'unbundling'.
France and Germany, who argue that any move to forcibly break up their national energy giants would be illegal, put forward an alternative proposal on the table in Luxembourg.
This involves leaving the ownership of the grid in the hands of the parent company, but setting up a separate and independent subsidiary to manage the network.
'While the majority of delegations and the commission see full ownership unbundling as the first best option, an option allowing for an Independent Transmission Operator (ITO) has been developed,' a draft document discussed by ministers read.
A number of provisions are foreseen to ensure effective an separation between the parent company and its subsidiary. For instance, managers are prevented from moving from one company to another for a number of years.
EU countries will still be able to force the sale of energy grids owned by big utilities if they wish to.
And while all member states agreed on the alternative solution put forward by France and Germany, the latter, backed by Austria and Portugal, resisted attempts to reach a more comprehensive deal on Friday, meaning further heated discussions lay ahead.
© DPA 2008
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