Paying Less in the EU

The performance of network industries, such as telecommunications, transport and energy, has continued to improve as competition puts pressure on service providers to keep their costs and prices down, the commission said.

The EU executive underlined that access to services at affordable prices for the less well-off was also improving.

"The EU's policy of opening the telecoms, transport and other network industries to competition has been the right one, since this has made them more competitive by putting downward pressure on prices without compromising either the service or its quality," said EU economic and monetary affairs Commissioner Joaquin Almunia.

He urged more liberalization, however, saying further action was needed to open so-far state-protected industries to internal and foreign competition.

EU fighting to open up more competition

The commission is fighting hard to open up the bloc's network industries, with the focus on telecommunications, postal services, electricity, gas, air, road and rail transport, which together account for around 8 per cent of the bloc's value added and employ more than 10 million people.

EU officials said regulatory changes in network industries had created the conditions for the emergence of more competitive markets, with new and better products on offer.

"People are flying as never before" as the number of direct flight routes connecting European cities doubled since 1992, said EU spokeswoman Amelia Torres.

Also prices in these sectors had fallen over the last decade, in particular in the telecommunications and air transport sectors, she said.

Same bonuses to come in time in the energy sector

The commission admitted that benefits were less visible in the energy sector because the liberalization process was more recent and because of the steep increase in oil and gas prices worldwide since 2004.

The EU executive also complained that some governments were not correctly implementing the regulatory framework legislation in the energy sector.

Productivity in network industries has grown faster than in the rest of the economy, the commission said, adding that this was often accompanied by employment growth.

Furthermore, in many countries the number of jobs created by new entrants in the telecommunications sector, for example, greatly outnumbered the job losses at the incumbent companies.

The commission report comes at a time when France in particular is voicing increased opposition to across-the-board economic liberalization, with French President Nicolas Sarkozy instead putting the emphasis on so-called "economic patriotism."

Sarkozy succeeded last month in persuading other EU leaders to remove a reference in the bloc's planned "reform treaty" to the need for "free and fair competition" in EU industries, a move which many in the bloc fear will slash commission powers in the sector.

But EU officials including Almunia and commission competition chief Neelie Kroes have said this will not curb their drive to liberalize Europe's economic sectors.