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The European Commission is preparing to take legal action against France over the delay in opening up its electricity market to competition.
The European Union's anti-trust watchdog is expected to begin formal proceedings if the French government does not agree a law abolishing its electricity monopoly in the next two weeks.
The move follows protests by British, German and Dutch ministers that Electricit� de France, the state-owned power group, has been able to compete in their markets while the French electricity market has remained closed. An EU directive requiring member countries to open at least a quarter of electricity sales to competition was triggered in February this year but has still to be implemented by France.
The French senate is discussing proposed legislation that would end EdF's monopoly over electricity supply. But the rule changes have become bogged down in a legislative backlog facing Lionel Jospin's government.
Competition experts in Brussels are believed to be unhappy with the delay. There are also doubts about the effectiveness of the legislation under discussion by the French government.
Power companies in Britain and Germany have expressed concern over restrictions that would ban electricity traders that were also not generators.
There is also concern that competition would be limited to supplies to only about 200 large French industrial and commercial customers, consuming 40GwH. British and German markets have been fully liberalised.
Werner M�ller, Germany's economics minister, and Stephen Byers, British industry secretary, agreed last month to work together to put pressure on the French authorities to implement the directive.
The Dutch economics ministry is due to rule shortly on measures to restrict French power sales in the Netherlands under reciprocity clauses in the directive. These require countries to provide equal access to power markets.
The EU's executive body could take France to the European Court of Justice over its failure to enact EU rules. The government could then face a large fine. The first step in any legal action would be a formal letter of complaint to the French government.
When the Commission gave the go-ahead for EdF's alliance with US trading company Louis Dreyfus, to form a power trading company, it barred the joint venture from operating in France until the French market is liberalised.