French approve liberalization

The French government has approved a draft law to liberalize the country`s electricity market. Minimum concessions will be made, however, to bring the market in line with the EU directive on electricity market liberalization.

The text is due to go before the National Assembly in February 1999. The rejection of a more liberal approach has brought criticism from Vivendi, the European conglomerate and EdF`s main potential competitor, which called the measures “conservative”.

The law will benefit about 440 major industrial consumers, representing just over 25 per cent of total French consumption. EdF will retain its dominant market position and will remain state-owned. It will also keep control of the high voltage transmission network.

The EU directive of electricity liberalization states that nations must open 25 per cent of their market to competition by 19 February this year, rising to 33 per cent by 2003. France will be one of the last nations to liberalise its markets.