Proposed EnWG holds threat for cross border trade

Developments in Germany, mentioned on today's conference call. mcs
---------------------- Forwarded by Mark Schroeder/LON/ECT on 10/11/2000
17:30 ---------------------------

Paul Hennemeyer
10/11/2000 16:46
To: Gregor Baumerich/LON/ECT@ECT, Peter Kreuzberg/FRA/ECT@ECT, Heribert
Kresse/FRA/ECT@ECT, Antony Steiner/LON/ECT@ECT, Peter Styles/LON/ECT@ECT,
Mark Schroeder/LON/ECT@ECT
cc: Christopher McKey/FRA/ECT@ECT, Joe Gold/LON/ECT@ECT, Nailia
Dindarova/LON/ECT@ECT

Subject: Proposed EnWG holds threat for cross border trade

We have received an advance copy of the proposed EnWG (energy law). The
proposed changes
to the EnWG has been agreed upon within the German Economics Ministry and is
a direct response to Brussel's
infringment proceedings against the German government.

The proposed law has many flaws. The chief one is a so-called "Schutzklausel"
which will empower the German
Economics Ministry to prohibit imports of electricity and gas into Germany
from other EU member states if the
the originating market is not as open as Germany's is. It will also allow the
Ministry to prohibit imports
of power and gas imports from non-EU states. The latter is of course aimed at
the so-called
"dirty power"imports from central and eastern Europe.

The timeline is roughly as follows:

1. Consultation with the Verbaende and the Ministry on Nov 13
2. Consultation with the Laender about a week later.
3. Kabinet-verison ready by December 20th
4. Possible passage of the law by the Bundestag in March of 2001.

We are doing the following:

1. Providing as EFET a critique of the proposed law - with special focus on
the Schutzklausel.
2. Lobbying the EU not to withdraw their infringment proceeding against the
German government until
certain changes are made in the proposed law.
3. Attending the Ministry consultations to raise our grave concerns.
4. Explore a legal challenge to the Schutzklausel - which even the Economics
Minsitry agrees is legally
problematic.
5. Possible PR actions aimed at "naming and shaming"

Thanks, Paul