The European commission opened a new front in its campaign to break up "national champion" power generators yesterday, urging Germany to give up its "golden share" in the country's biggest gas supplier, E.ON-Ruhrgas.
Charlie McCreevy, the internal market commissioner, wrote to the German authorities demanding to know how they justified special conditions in their 2002 approval of E.ON's takeover of Ruhrgas that protect the enlarged group from foreign predators until 2012.
It is understood that his move follows a string of complaints that the German "change of control" clause is illegal. Spain, which is thought to be one of the complainants, is itself under siege from Brussels for unlawfully imposing conditions on E.ON's €37bn (£25bn) takeover bid for the country's biggest energy group, Endesa, and usurping the EU competition authority's sole right to rule on cross-border mergers. Italy, also rapped for illegally blocking a €14bn merger between the motorway groups Abertis of Spain and Autostrade, is another complainant.
"There is no place for golden shares in the EU's internal market," Mr McCreevy's officials said, pointing out that the European court of justice, Europe's highest court, has consistently ruled them incompatible with EU treaties.
The court has, in the last four years, ordered the UK to give up its golden share in the airports operator BAA (now owned by Spain's Ferrovial) and issued similar rulings against France, Portugal and Spain. Last month it outlawed the Dutch government's golden share in the national postal operator TNT and it is soon to hear the commission's case against the so-called Volkswagen law, which ensures the German federal state of Lower Saxony keeps a blocking minority vote in Europe's biggest car manufacturer.
But the court ruled in favour of Belgium in 2002 over the golden share it had in the gas distribution business Distrigaz, saying it was a legitimate measure to ensure the supply of gas in a national emergency. The court said the arrangement, subject to review, was "proportionate".
E.ON insists its special arrangement does not constitute a golden share. It allows Berlin to veto any foreign takeover of E.ON if it puts German gas supplies at risk and to force the sale of Ruhrgas to a third party, reducing the takeover's value. Mr McCreevy's officials said he would not have acted unless there were grounds for believing the arrangement was unlawful.
The commission was enraged four years ago when the government of Gerhard Schröder overruled German regulators and waved through E.ON's purchase of Ruhrgas. The group has since cemented its 60% market share in Germany and control of Europe's gas distribution network through a series of deals with Russia's Gazprom. Mr Schröder is a paid consultant for Gazprom.
E.ON and other big European energy groups are lobbying hard against commission proposals, due in the new year, to force them to separate their infrastructure and production arms. Brussels has also extracted substantial sell-offs from Suez and Gaz de France over their €70bn merger next month. Suez must sell its 57% holding in Belgium's Distrigaz. But the commission is wary of moves to award Belgium a golden share in the merged group, which would be 34% owned by France.
