EUROPEAN ENERGY LAW

“Is European Energy Law compatible with the basic tenets of the European Economic Constitution?”

Table of Contents

Chapter I: Introduction3

The reasons I am pursuing this area of law3

Chapter II: Literature Review3

The European Economic Constitution3

An “ever closer union”3

The Treaty of Rome and challenges of the EU3

Significant Articles of the Treaty of Lisbon3

The Energy Crisis3

Chapter III: Discussion3

Competition Law and Policy to tackle the energy crisis3

De-regulation3

The “free” market3

Chapter IV: Analysis3

The Limitation of Markets3

The Pricing of Energy3

Concentration of power in the energy sector is dangerous: OPEC3

Oligopolistic nature of the energy market3

The Four Freedoms3

The Free Movement of Goods3

Energy dependence3

Transmission3

State Aid3

Government controls the framework in which markets operate:3

National Oil Companies3

The French Government3

Dieter Helm3

Structural Funds3

Mergers3

Article 102 (Lisbon Treaty); abuse of a dominant position3

The Commission3

Monopolies3

Chapter V: Conclusion3

The effects on the environment3

Free movement of goods in relation to transmission of gas3

Externalities3

Undertakings3

Conclusion i.e. what should be done to improve the current situation?3

References3

Footnotes3

Notes3

Bibliography3

“Is European Energy Law compatible with the basic tenets of the European Economic Constitution?”

Chapter I: Introduction

The reasons I am pursuing this area of law

“However, the economic order of the Community is that of a market system, essentially based upon the concept, and process, of competition. Individual rights are guaranteed, but certain limits can be set on the exercise of these rights in the light of the public interest. The EC Treaty allocates competition as a principle goal of the Internal Market, with Article 3 EC creating a picture of “an internal market characterised, as between MS, of obstacles to the free movement of goods, persons, services and capital” and “a system ensuring that competition in the Internal Market is not distorted”. This is to take place within the context provided by Article 4 EC of “an open market economy with free competition”. The Court has subsequently elevated competition into one of the fundamental principles of the Economic Constitution”.

The EU is a political animal - an “unruly horse”- whose economic harnesses have prevented it from losing control; it ultimately seeks to make money, and therefore caters, first and foremost, for the political interests of the Member States. I do not think the EU is truly “economic” in nature; it seeks to emanate the centralisation of power. We see this happening because the Lisbon Treaty talks in economic terms but the EU acts politically. These are the underlying assumptions of the Lisbon Treaty. We see this in the competition provisions of the Treaty which favours economic liberalisation over capitalism and Governmental intervention in the market.

Reliable and continuous supply of both electricity and gas at reasonable prices is an essential public service. In fact at present, the level of economic and social development, which has been achieved in the EU causes energy, especially electricity to be a public good, pertained to everyone, without differentiation on material status. Paradoxically, energy is also considered to be a commodity in the case law of the European Court of Justice,2 and as such, its price should be determined by supply and demand (Jamasb and Pollitt, 2005; Joskow, 2006a; Nowak, 2009a), not by non-market factors such as ...