PARIS, Oct 23 (Reuters) - France is set to clear a key obstacle to the partial privatisation of EDF [EDF.UL] on Monday with the signing of a deal guaranteeing the provision of public services by the energy giant.
Prime Minister Dominique de Villepin and his finance and industry ministers will sign the deal with EDF chief Pierre Gadonneix, Villepin's office said on Sunday.
The conservative government has been pushing for assurances from EDF that it will protect the country's cherished public service ideals in a bid to overcome heated trade union opposition to the flotation.
Monday's deal is expected to contain tariff guarantees. High fuel prices and the approach of winter have made energy costs a sensitive topic, with unions saying a market-oriented EDF could raise electricity bills purely for gain.
The rate of investments is another potential stumbling block to the flotation. EDF has set out plans to invest 26 billion euros ($31.15 billion) over three years but Villepin wants that figure raised to 30 billion to favour French production.
Full Story @ Reuters.com
While not a fan of the French government, I have to say this on the surface appears to be a positive step. Besides, if the unions and socialists are against it, it must be good. :-) -Ed
Posted by Muddy at October 24, 2005 08:17 AMOf course it's stupid to create markets for gaz and electricity. It always lead to enron or California scandals.
There are such things called natural monopolies.
And for a very strange reason some people like to transfer all monopolies to private owners, think Microsoft, utilities ...
Of course for a stock holder there's no better situation, with government backing a monopoly situation, profits skyrocket.
In the end the consumers and the tax payers get screwed up, but who cares ?
Not the right wing people anyway.
Just read the thing you post :
prices will remain fixed for the consumers although energy is becoming more expansive (at least as long as it is necessary to draw political support).
All workers advantages will be guaranted by the government. (same)
So the only way for private owners to make some profit will be to pass more (social) costs to the tax payer.
Tax payers pay so that a bunch of rich people make more profit.
That's your idea of what is good...
But wait : it must be good if it does not please those you don't like.
Exactly the same lack of reasonning as usual.
I like them, they like it, so I like it.
I like them, they dislike it, so I dislike it.
I dislike them, they like it, so I dislike it.
I dislike them, they dislike it, so I like it.
Exactly the work of passions described by spinoza.
Start to analyse things with your mind and you'll get better results.
quick response, I like that.
Actually watching it on BBC was the only way I knew of this, according to them only fifteen percent of EDF would be sold and would raise six to ten billion to re-build the electric infrastructure. How is that the black plague type scenario you paint?
The gaz private twenty two percent sell off and subsequent twelve percent potential price hike is not a shocker as natural gas prices worldwide are shooting up, my gas bill is going to be crazy this winter.
Government is as big a crook as the private sector, just because it's government run does not mean it's better. It only means they can hide their corruption easier.
Posted by: Muddy at October 24, 2005 08:37 AMYour comment could not be submitted because your a w___r : c...
The return on public capital is way lower than the return on private capital.
If the company goes private, even by a small amount, the stock holders will ask for higher returns.
These can come by (to make things simple) :
- lowering wages or firing people.
Problem : the government has made huge promisses to unions that this will not happen for a long time at least. + unions are still strong.
- raising prices
- subsidizing the company.
What we've seen in the last 4 years is huge subsidies to the future private company.
Basically the government has agreed to pay the pensions of the workers, so that the stock holders could make some profit.
Oops seems most of my post did not make its way in here, although I tried to post it by dividing it in parts.
My main point is : the only way for EDF to make the profits necessary to attract private capital is for the tax payer to subsidize the company.
And I'm not in favor of handing out public cash to useless private investors.
It would cost much less to the tax payer to use the same subsidy money directly and borrow the rest.
The only reason why the government is selling the company is because it lacks the courage to reform it where reform is needed.