Daily Archives: January 11, 2007

On the face of it, the European Commission had some shocking news for shareholders of Eon and RWE in Germany, OMV in Austria and similar listed energy groups across the region. The Brussels regulator on Wednesday vowed to break up all energy suppliers that are also active in managing networks such as grids and pipelines. It argued that the combination of the two businesses stifled competition.

Given the Commission’s sweeping powers to initiate legislation, scrutinise mergers and pursue antitrust infringements, such a step is certainly not beyond Brussels’ reach. That would mean forcing some of Europe’s biggest groups not only to sell off priceless assets but also to face much sharper competition from smaller rivals.

And yet, this shocking news somehow failed to strike fear in the hearts of investors. RWE’s shares actually gained slightly, while Eon and OMV posted only minuscule falls that mirrored the broader market. What’s up? Don’t traders read the newspaper?

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On a lightning visit to Berlin last year, I discovered that Germany is groaning with plans for its six month long presidency of the EU. One theme struck me in particular: Angela Merkel’s improbable ambition to bring hope to the Middle East. You might not believe it, but this is an issue where the German chancellor really thinks she can make a difference.

Like many other European states, Germany feels strongly that the US ought to do more with its international partners to broker a deal between the Israelis and the Palestinians.

That’s why Merkel told the FT she wanted to revive the Quartet, the body made up of the US, the EU, Russia and the United Nations that is supposed to work for Middle East peace.

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