ETUC Conference: “What energy policy for the European Union?”
To be checked against delivery
Ladies and Gentlemen,
I am glad to open this conference. I would like to thank the EESC for their support to this event.
This conference comes in good time, in view of the Spring Summit which will take place in two days and where heads of states will be asked to take major decisions on the basis of the Commission’s proposals contained in the ‘energy and climate change package’ recently published by the Commission.
1. Obviously, the European Union is in the middle of the river. Whether it be the EU citizens or the policy makers in Europe, we have a rather clear awareness that our current energy model can not be sustained in the long run. In a very short period of time, namely the last 2 years, we have experienced very concretely the various risks entailed by our energy choices:
first of all, Russia’s decision to turn off the gas supplies to Ukraine in December 2005 (and thereby to Western Europe) concentrated the attention of decision-makers on security of energy supply and to the huge potential consequences it may have for the individual and industrial consumers. This recalled us that the EU is an energy dependant region, growing rapidly more so. The prices being charged by our external suppliers are a critical factor for the EU consumers, and these are more frequently global market prices, as in the case of oil and increasingly in the case of gas and coal.
secondly, the Commission acknowledged recently that liberalisation of the electricity and gas markets has not delivered its promises. To put it bluntly, most of the time, it has led to public monopolies being replaced by private monopolies. Besides, the removal of regulated prices has led to higher, and not lower, energy prices and has created huge uncertainties about investments in the energy sector;
finally, the intensive use of fossil fuels since the beginning of the industrial revolution has led to the accumulation of greenhouse gases in the atmosphere at an unprecedented pace, which will result in very serious and possibly irreversible damages to our societies if nothing is done to reverse the current trend. Indeed, up until the 1980s, we tended to think of ’development’ as synonymous with ’the development of energy generation’. This led to the constant development of energy consumption in Europe. The current focus on climate change should not however, hide the other risks associated with energy, the biggest one being nuclear waste.
In the future, we can not exclude the risks of conflict arising from increased competition for access to scarce energy resources.
2. One should ask who is actually paying for the failure of our energy model. Without any doubt, the workers pay a disproportionate share of the bill. • As workers, first. Mostly due to liberalisation, privatisation and restructuring in the energy sector, we estimate that at least 300,000 workers have disappeared from the energy industry, still many more jobs are threatened; there is an increase in out-sourcing and pressure on working conditions.
In the energy intensive industry, the impact of raising prices is severe enough to force some to begin cutting back on their operations and consider relocating to other parts of the world.
As consumers, they have paid through the increase in the energy bill.
As citizens and tax payers, they have lost control over a sector which is a strategic one and which was providing revenues to the public budget to be spend for the general interest.
Less jobs, more bills, less democratic control : this is the summary of energy policy impact on workers
3. From the perspective of the European trade union confederation, the more urgent challenges ahead of us are threefold:
we need to find a solution to the internal market dimension in a pragmatic way. Ideology and theoretical conception of perfect markets should be left behind. The market alone is not well equipped to provide the adequate economic signal to trigger the substantial investment that will be needed in the modernisation of power stations and in the electricity network, especially in the current situation of undercapacity. The energy and environment situation means that time out needs to be taken to properly reassess the drive to liberalisation. There is enough experience of market failures (blackouts, price gouging, job losses) even before the incipient energy crisis began in earnest, to provoke a review.
We must ensure that public service obligations are fully implemented and the access to energy and heating for all is ensured. High quality public services are a key element of the European economic and social model. Liberalisation has challenged the public service obligations systems that were in place hitherto. There needs to be a re-examination of the performance of the new energy companies to ensure that the most vulnerable consumers and regions are not disadvantaged and access to energy for all is not restricted. I take this opportunity to let you know that the ETUC has launched a Europe-wide petition calling on the European Commission to take action to protect and strengthen public services that are vital to the wellbeing of all European citizens.
Europe needs to achieve a ‘just transition’ towards a low carbon economy. Working people, as well as consumers, want both a strong economy and a clean environment. It is true that some approaches to climate and energy policy may hurt economic growth and bring these interests into collision. However, we know that carefully designed and negotiated policies can benefit both the economy and employment and help preserve the competitiveness of energy-intensive industries. When it comes to the impact of climate change mitigation policies on the competitiveness of intensive energy industries, one should avoid drawing simplistic analysis and conclusions. There are indeed three main pressures on these industries regarding prices, Kyoto being only one of them: the functioning of the internal energy market, globalisation, and environmental regulation.
4. If a European approach is not successful, there is danger that national policies prevail. This will have long lasting effects on the wealth of the European industries and their employees, on vulnerable consumers and will increase the cost of environmental adjustment.
The ETUC supports the idea that I advanced in the High Level Group on Competitiveness, Energy and environment - and reinforced by Jacques Delors, the former President of the European Commission - for a new European Treaty on Energy and environment, after the fashion of the European Coal and Steel Community. This could take account of environmental demands, strategies to maintain supplies in times of crises, harmonised investment, massive push for R&D, participation of companies and trade unions, and a specific social fund. The globalization adjustment fund has been a first step. We should see how to enlarge the scope and the allocations of this fund to anticipating climate change.
The energy industries and their workforces were there at the beginning of the European experiment which began after the Second World War. It was not just workers from the coal and steel industries who sat in co-equal numbers on the ECSC Consultative Committee along with employers representatives, but also workers representatives from the using industries, like electricity generation. Similarly, the consultation and co-determination mechanisms in the coal and steel industries were often better developed than elsewhere, at the national and local levels. The first social dialogue at European level began there as well. This special part of European history is subject to challenge as the world faces another period of rapid global change. The European Social Model has many strengths and it, too, needs to be able to pace the process of change, to re-adapt so that it can play a full part in the management of change.
In conclusion, we must admit that no one has the answers to the large and complex energy issues we face in Europe, yet. In some ways the answers can only be reached through a common process, involving the Member States, the European institutions and the social partners (both industry and unions) as well as the rest of civil society. This is the reason why we invited you today to exchange experiences and viewpoints, in what will be, I hope, a very fruitful debate.
Ladies and Gentlemen it just remains for me to thank all those who have agreed to contribute to this conference, all of you who have travelled here to attend.
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