Experts disagree on market liberalisation

by Jerome a Paris Fri Jun 29th, 2007 at 04:14:20 AM EST

A first press report further to the energy conference I went to in Brussels earlier this week:

The liberalisation of energy markets was a central theme in the discussions [at an annual Energy Europe conference organised by the Brussels think-tank Friends of Europe]. (Euractiv.com)
Arguing against liberalisation, blogger and investment banker Jerome Guillet said that the resulting prohibition of state guarantees for investments will encourage investment in cheaper carbon-intensive technologies, such as coal or gas-fired power plants, and will discourage investments in more (initially) expensive renewables infrastructure.
Dominique Ristori of the Commission's DG Energy and Transport refuted the claim, saying that in the current context of volatile prices for energy products, it cannot be assumed that certain energy sources will always remain cheaper. Ristori added that even if member states were permitted to support renewables infrastructure, there is simply not enough money in public coffers to support the massive investments needed in energy infrastructure in the coming decades.

I said "cheaper to finance", not "cheaper" (which makes Ristori's reply, which is correctly transcribed, mostly irrelevant to my actual point) but hopefully the arguments are slowly getting out there.

Bumped by whataboutbob

Experts disagree on market liberalisation | 32 comments (32 topical, 0 editorial, 0 hidden)

Re: Experts disagree on market liberalisation (4.00 / 7)

So, whose gates are YOU crashing?

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Thu Jun 28th, 2007 at 03:49:04 PM EST

Re: Experts disagree on market liberalisation (4.00 / 3)

I was away Tuesday so I missed the post about this. Very cool. Keep up the good work. (And don't let them misquote you.)

Good question, too. Looking forward to any responses, esp. following up on my remarks about grassroots activity in the US v. Europe in the Obama diary.

Me? I was recently locked out of my apartment and had to break in, so I suppose, crashing my own gate...

"Pretending that you already know the answer when you don't is not actually very helpful." ~Migeru.

by poemless on Thu Jun 28th, 2007 at 04:19:00 PM EST
[ Parent ]

You asked a good question (none / 1)

Is writing on dK and ET and getting heard in various places "grassroots activity"? For someone who's pretty asocial it's not too bad, I hope.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Thu Jun 28th, 2007 at 04:22:20 PM EST
[ Parent ]

Re: You asked a good question (4.00 / 2)

I was hoping for responses from people in addition to yourself. We all know what you are doing. And no, not shabby at all.

Gate-crashing, grassroots activity, I think it is all related. But one day you are going to actually have to run for office... :)

"Pretending that you already know the answer when you don't is not actually very helpful." ~Migeru.

by poemless on Thu Jun 28th, 2007 at 04:29:54 PM EST
[ Parent ]

but it's not grassroot activism (4.00 / 2)

which is also needed. I suppose (I hope) that we do what we are best suited for. As long as we do something. But can we really say that it is enough? It's not.

But as askod pointed, it's a bit harder to write about local activism here on ET, given the site's nature, so not all individual efforts may be visible here.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Thu Jun 28th, 2007 at 04:36:07 PM EST
[ Parent ]

Re: but it's not grassroot activism (none / 1)

And you raise a good point. What is needed? It might be that the problems in Europe require different solutions than those in America. And while
"doing something" is fine, the problems in America can be fixed until we change the people running the place and bring citizens back in to the democractic process.

Perhaps a different approach is needed elsewhere.

So far as what people are best suited for, I think there is a fine line between that logic and coming up with excuses to remain in your comfort zone... Though we all obviously have our own talents and strengths. The thing about politics is that it usually comes down to who is doing it, not who is best suited for it. I really think that democracy isn't like a hobby or interest. It only works if everyone participates. I think 10% of it is finding a good way to use your talents, and 90% of it is just getting off your ass and doing something because no one else will, or the people who will don't share your values.

Stepping down from my little soapbox now...

"Pretending that you already know the answer when you don't is not actually very helpful." ~Migeru.

by poemless on Fri Jun 29th, 2007 at 01:19:48 PM EST
[ Parent ]

Re: You asked a good question (none / 1)

But one day you are going to actually have to run for office... :)

I got an e-mail on May 25 about candidate selection for the European Parliament with an application deadline on July 2. It turns out (as I found out today) that for England the real deadline was May 25. Go figure.

Can the last politician to go out the revolving door please turn the lights off?

by Migeru (migeru at eurotrib dot com) on Thu Jun 28th, 2007 at 05:10:38 PM EST
[ Parent ]

Re: You asked a good question (none / 1)

Can anyone apply to be a candidate for the European Parliament? (Are they elected? If so, by whom?) Why did you get the e-mail?

"Pretending that you already know the answer when you don't is not actually very helpful." ~Migeru.

by poemless on Thu Jun 28th, 2007 at 05:16:11 PM EST
[ Parent ]

Re: You asked a good question (none / 1)

Because I am a member of the party. The applicants get vetted by a committee to get on a shortlist for selection by the members. I missed a number of deadlines, not all of them because of this stupid e-mail I got.

It's probably possible to run as an independent as well, as opposed to on a party list.

Can the last politician to go out the revolving door please turn the lights off?

by Migeru (migeru at eurotrib dot com) on Thu Jun 28th, 2007 at 05:32:33 PM EST
[ Parent ]

Re: You asked a good question (none / 1)

Which party is this?

Running for office is a huge time committment.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Thu Jun 28th, 2007 at 07:16:38 PM EST
[ Parent ]

Re: You asked a good question (none / 1)

The Liberal Democrats.

Can the last politician to go out the revolving door please turn the lights off?

by Migeru (migeru at eurotrib dot com) on Fri Jun 29th, 2007 at 03:07:07 AM EST
[ Parent ]

Re: Experts disagree on market liberalisation (4.00 / 3)

ahem.

Can the last politician to go out the revolving door please turn the lights off?

by Migeru (migeru at eurotrib dot com) on Thu Jun 28th, 2007 at 05:15:19 PM EST
[ Parent ]

Re: Experts disagree on market liberalisation (4.00 / 3)

*Round of Applause!*

"Pretending that you already know the answer when you don't is not actually very helpful." ~Migeru.

by poemless on Thu Jun 28th, 2007 at 05:20:20 PM EST
[ Parent ]

Re: Experts disagree on market liberalisation (4.00 / 4)

This has got to be one of the dumbest remarks of recent days:

...there is simply not enough money in public coffers to support the massive investments needed in energy infrastructure in the coming decades.

If governments can't fund infrastructure then who can? After all governments can a) print money, b) borrow, c) raise taxes. Private firms can only borrow (or sell shares which is equivalent).

Is he saying that private firms are more powerful than governments now? Also government is the only type of organization that can afford to run at a loss indefinitely and thus plan for an extended period of uneconomic activity while these new projects are being rolled out. Private firms have shrunk their horizon for investment payback to five years or less for almost every project. The idea that one would create an investment that would take 30 years to fully profit from has disappeared. No more TVA projects, I guess.

If government has abdicated its role then perhaps we don't need one anymore. We can just have the nation of Exxon or the nation of Gazprom instead. In effect it won't be too different from the days of the Dutch East India Company.

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Thu Jun 28th, 2007 at 04:19:26 PM EST

Yep (4.00 / 2)

Part of the longstanding devaluation of the role of the State. That sad thing is that this guy is French.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Thu Jun 28th, 2007 at 04:23:29 PM EST
[ Parent ]

Re: Experts disagree on market liberalisation (4.00 / 2)

It is dumb, and not just for the reasons you give...

Private firms are NOT just limited to issuing equity or borrowing.

In Canada, private firms put chunks of their gross revenues into Trust, and the resulting units in "Income Trusts" are hugely popular with Pension Funds, who like to get their hands on corporate revenues before the management do.

Blackstone's recent IPO did not consist of shares in a Blackstone corporation but units in a Limited Partnership.

But even more radical, as I point out - ad nauseam, no doubt - the UK LLP (and US LLC) allows ANY enterprise, public, private, charitable, social, sole trader, whatever to raise capital simply by sharing with Investors the GROSS revenues from a business or from a productive asset which has been financed.

Contrary to conventional wisdom therefore, Governments do NOT need to borrow to obtain investment - they can simply raise what is in effect "Public Equity" by selling forward an agreed proportion of rental revenue or even production (eg electricity)instead.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Thu Jun 28th, 2007 at 07:24:56 PM EST
[ Parent ]

Re: Experts disagree on market liberalisation (4.00 / 3)

Ristori added that even if member states were permitted to support renewables infrastructure, there is simply not enough money in public coffers to support the massive investments needed in energy infrastructure in the coming decades.

Wow, and I thought I was a doomer.

And yes I realize he's not so much as doomer as he is promoting a corporate banana republic future.

you are the media you consume.

by MillMan (millguy at gmail) on Thu Jun 28th, 2007 at 04:34:22 PM EST

Re: Experts disagree on market liberalisation (4.00 / 5)

The denials from DG TREN are really something. What about the billions of EU regional money being negotiated with member states for the 2007-2013 period?

The group I work for Bankwatch has been analysing the draft funding plans of the ten central and eastern European new member states, and we have found that energy efficiency and renewable energy have each been allocated a paltry 1 percent of the 177 billion euros earmarked for these countries from the EU's Structural and Cohesion Funds.

more details here: http://www.bankwatch.org/newsroom/release.shtml?x=1982987

by MaBozza (greig.aitken AT gmail.com) on Fri Jun 29th, 2007 at 04:02:48 AM EST
[ Parent ]

Re: Experts disagree on market liberalisation (none / 0)

Welcome to ET, MaBozza! Updates on bankwatch's efforts and ways we can cooperate would be a great addition here.

Our knowledge has surpassed our wisdom. -Charu Saxena.

by metavision on Fri Jun 29th, 2007 at 06:17:35 AM EST
[ Parent ]

Re: Experts disagree on market liberalisation (none / 1)

Very interesting.

And welcome to ET!

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!

by A swedish kind of death on Fri Jun 29th, 2007 at 06:18:14 AM EST
[ Parent ]

Re: Experts disagree on market liberalisation (4.00 / 2)

Not having any more details, I'd call it
"Expert meets propaganda wall". Infuriating.

Our knowledge has surpassed our wisdom. -Charu Saxena.

by metavision on Thu Jun 28th, 2007 at 06:20:58 PM EST

Jusy for fun (4.00 / 5)

One of the senior EU guys present at the conference told me I had to drop my ideological blinders.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Fri Jun 29th, 2007 at 03:22:00 AM EST

Re: Jusy for fun (4.00 / 2)

Pinko subversive!

by Solveig (link2ageataol.com) on Fri Jun 29th, 2007 at 03:47:31 AM EST
[ Parent ]

Re: Jusy for fun (4.00 / 2)

Yeah! Don't you know you're supposed to believe in the market, not economic theory?

by nanne (zwaerdenmaecker@gmail.com) on Fri Jun 29th, 2007 at 04:27:33 AM EST
[ Parent ]

Re: Jusy for fun (none / 1)

Now I happen to believe in the market - just not in a market which operates for the profit of "Rentiers".

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Fri Jun 29th, 2007 at 04:43:46 AM EST
[ Parent ]

Re: Jusy for fun (4.00 / 2)

Well, sometimes the house of cards works well enough long enough I think, but you have to be pragmatic about it. Energy liberalisation can only work if the innate tendency towards monopolisation on a network-bound market can be overcome somehow, which for energy is quite difficult (and why the Commission wants to have decoupling done, but I don't know if that will work well enough, it was also done in California, IIRC).

Then you'd have a functioning market, but even a functioning energy market would tend to have perverse preferences, due to the higher discount rates used by companies to evaluate investment, which creates a bias towards higher running costs away from higher front-up investment, and due to the fact that the external effects of pollution are not fully internalised.

by nanne (zwaerdenmaecker@gmail.com) on Fri Jun 29th, 2007 at 08:51:21 AM EST
[ Parent ]

Just for fun (4.00 / 3)

I consider myself a centrist socialist, or social liberal - and many here on the site probably think the same about me.

We have to find ways not to be labelled extremist. One way is to clearly claim the center; the other, I suppose, is to also proudly wear labels that are being painted as extremist (like "socialist") and to stick by our ideas unashamedly.

So yes, I'm a pinko subversive, if that's what they want to call it, and proud of it.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Fri Jun 29th, 2007 at 04:47:24 AM EST
[ Parent ]

Re: Just for fun (4.00 / 2)

It seems the closer one gets to government power, the narrower and more rightwing the Overton window is. I mean, a social liberal is pretty much at the center of the public discourse, in France ; but that is apparently too left wing for the EU. Jospin lost his election in 2002 for not being lefty enough, yet his was the government the furthest to the left in the OECD.

The thing is, "they" define the center ; and have pulled it so far to what is traditionally right wing that it is almost impossible to claim the center with any kind of left wing proposals. In France, Bayrou's strongly liberal program can pass as "a bit to the left of the center".

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Fri Jun 29th, 2007 at 05:48:48 AM EST
[ Parent ]

Re: Just for fun (4.00 / 2)

The really amazing thing is that you are an expert on project finance and they are telling you to drop your ideological blinders when you make them an argument about the impact of policy choices on the financing of energy projects and the impact that has on their policy objectives.

Can the last politician to go out the revolving door please turn the lights off?

by Migeru (migeru at eurotrib dot com) on Fri Jun 29th, 2007 at 06:00:54 AM EST
[ Parent ]

Re: Just for fun (none / 1)

We have to find ways not to be labelled extremist.

No, we have to make sure that everyone understands who the extremists really are.

It's an interesting accusation and one of many that's going to be used to attack the person and not deal with the issue.

The point to remember is that empirically, we're right and they're wrong. If they want to argue with reality that's their prerogative, but challenging market-speak is the only rational reality-based position in the room.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Jun 29th, 2007 at 06:54:09 AM EST
[ Parent ]

Re: Jusy for fun (4.00 / 2)

Did you tell him "likewise" or "after you, sir"?

Can the last politician to go out the revolving door please turn the lights off?

by Migeru (migeru at eurotrib dot com) on Fri Jun 29th, 2007 at 04:54:18 AM EST
[ Parent ]

Something like that (4.00 / 2)

I gave him again the "jobs programme for bankers and rightwing politicians" line. I told him the French government had capitulated to the City. He told me he hated the City (and the sad thing is that, as he was British, that was probably true - he's probably spending a lot of time pushing back against the incessant tide from over there).

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Fri Jun 29th, 2007 at 06:17:10 AM EST
[ Parent ]

Experts disagree on market liberalisation | 32 comments (32 topical, 0 editorial, 0 hidden)

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Experts disagree on market liberalisation

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