French unions denounce privatization of national electricity producer
30 May 2004 14:14 GMT
On May 27, public gas and electricity workers stormed Paris in protest against the French government´s draft legislation to amend the statute that created the country´s nationalized energy producer in 1946. The amendment would open the national producer to private capital investment, a move that critics are denouncing as a step towards the privatization of France´s electricity.
Last Thursday, public gas and electricity workers stormed Paris in protest against the French government´s draft legislation to amend the statute that created the nationalized energy producer Électricité de France-Gas de France (EDF-GDF) in 1946. If passed, the amendment will open the national producer EDF to private capital investment. The manifestation, which was organized by France´s major unions, saw between 40 000 (according to police estimates) and 80 000 (according to union estimates) workers converge on the capital, while several regions of the country plunged into darkness.
The unions, as well as the Communist Party of France (PCF) and Socialist Party (PS), have decried the proposed amendment to EDF-GDF´s statute as an unwelcome step towards the privatization of the nation´s public energy system. The amendment was submitted to France´s State Council May 19, and is awaiting Council´s response by June 8. The unions are planning more demonstrations for the date the amendment is slated to become law: June 15.
In the context of the European Union´s proclaimed mission of creating a common liberalized European economy, the current French government has zealously trumpeted its commitment to privatization. French Prime Minister Jean-Pierre Raffarin has declared his objective to privatize all government functions that can be performed by the private sector, refocusing the state on what he describes as its "essential" functions, and leaving the rest of the "logistics" to the private sector.
However, the French government has denied that it is privatizing the national energy industry. According to Raffarin, the amendment is not privatization, it is simply indicative of a will to "development". The French Economy Minister, Nicolas Sarkozy, rationalizes the amendment as a way of giving EDF “the means” to be ready for July 1, 2004, which is the date that the government has set for opening the French electricity markets for professional clients to competition. In 2000, the government opened up the electricity market for the largest industrial clients to competition. By the first of January, 2007, it is aiming to have full competition accross the French electricity market.
The demonstrations on March 27 were scheduled to coincide with the reading of the draft legislation in Parliament. Seeking to reassure the public, Sarkozy extended the government´s list of "guarantees" that will accompany the amendment; on Thursday, he added a promise that the state will hang onto 70 percent of the capital of EDF-GDF. As the Marseille-based daily 20 Minutes noted, Sarkozy was visibly glancing out the window as he read out these reassurances.
In defence of Liberté, électricité
At 11 am on May 27, the protestors converged at the Bastille, the site of the prison of the old monarchical regime that was burned with the French revolution. Union placards proclaimed, “EDF belongs to the nation,” while T-shirts sported the slogan “liberté, égalité, gas, électricité,” linking the national public electricity and gas system to the values of French nationhood and citizenship,“liberté, égalité, fraternité” (liberty, equality and fraternity). The workers then marched along the course the unions had agreed upon with the police, down to the Invalides.
The day´s events proceeded in a spirit of raucus fanfare. When I chanced upon one of the contingents of demonstrators on a train station platform on the eve of the demo, en route for Paris, I mistook them for a crew of sports fans en route to a big game. Clad in matching red and blue t-shirts, the rowdy crowd that I encountered on the Cannes platform was cheering and blowing whistles, with cases of wine, beer and pastisse conspicuously in tow. They were awaiting the overnight train that the Conseil General du Travail (CGT), the largest union in France and one of the main organizers of the rally, had organized to transport public electricity and gas sector workers from the Southern regions of Cote d´Azur and Provence-Alpes to the demo. Similar transportation arrangements had been made to bring electricity and gas workers from all over the country to the capital.
During the march itself, loudspeakers blasted dance music, fire works exploded on the ground, and people whistled and sung as they marched, stopping only to sate thier appetites with sandwiches and beverages doled out of the open backs of the union trucks.
The demonstrations went on into the late afternoon, under the watchful eyes of police; walking away from the rally around 5 o´clock in the afternoon, I spotted dozens of police cruisers, buses and vans lining the side streets around the area where the protest had culminated. The gendarmes were ordering people walking away from the designated protest zone to remove their union t-shirts, and put them back on inside-out to cover up the slogans about electricity and liberty.
The costs of private investment
Discussions about the amendment of the EDF-GDF statute have been animated by fierce debates over the anticipated prices that will be entailed by a semi-private energy system, as well as over the effectiveness of such a system in meeting the energy needs of the French population.
"Do you want to pay more for your electricity?" , demonstrators asked the Parisian stopkeepers standing in the doorways lining the roads of the march. One CGT poster cockily inquired, "Do you prefer candlelight, like in California?"
The European Pariament and the French think-tank Institut Montaigne both maintain that the liberalization of EDF could lead to lower electricity prices.
However, under the nationalized system, the EDF has been able to provide the lowest electricity prices in Europe, while recent electricity price rises reported in France have been closely linked to the government´s moves to market competition. The major industrial clients of electricity, who have had access to liberalized electricity since 2000, have seen significant hikes in their electricity bills in the past few years. The President of the French Union of Electricity reported that the major energy consumers have their seen increases of 50 percent in just two years. Once strong advocates for liberalization, the Union of Industrial Energy Users recently denounced the "liberalization of perverse effects" and a "highly manipulable market" dominated by a "de facto oligopoly."
The unions have been quick to point to the fiasco-ridden energy privatization schemes in Britain, California, Italy and the North Eastern US and Canada; critics note that the cost of dividing up integrated national producers, advertizing spending, and the rampant corruption for which the Californian electricity industry became famous, result in price increases and deteriorating services.
Critics of the amendment maintain that allowing private capital investments in the EDF will subject the producer to the spurious interests of corporations seeking quick profits. Electricity prices will be subject to market forces, undermining the original equity and access goals of the EDF´s statute. Meanwhile, private investors are unlikely to make costly investments in facilities that will be used only in times of high demand.
This is particularly worrying in the context of the French electricity sector, where nuclear energy plays an important role. According to Le Monde Diplomatique, the reduction of 8,800 EDF jobs in the few past years has already impacted the maintenance of the nation´s nuclear power plants, and this situation will only become more precarious with the further job losses that privatization will likely entail.
Sarkozy rationalizes the move as necessary to ensure the success of the current national producers on the european scene. However, critics have noted that it is extremely difficult to effectively transport electricity, raising doubts about the plausibility of a common European electricity market.