Fenech Adami and Jospin: not so similar after all

As Franceís Ambassador Didier Destremau chastised the Maltese authorities for their slow privatisation programme, Franceís premier dropped plans to begin a partial privatisation of Gaz de France, the French state-run gas monopoly. The plans have been shelved until after next yearís parliamentary elections.

In the meantime, Malta goes on with its privatisation drive for Kordin terminal, MIA and the Freeport.

The postponement is a further sign that Lionel Jospin, the socialist premier, feels vulnerable in the wake of last monthís poor municipal elections results and needs to avoid any gesture liable to antagonise his leftwing supporters.

The move to open up Gaz de Franceís capital has been seen as essential to permit the group to compete internationally and adapt to deregulation in Europe. The company is the third largest gas operator in Europe with a Euros 9.1bn (Pounds 5.6bn) turnover.

But any change of ownership has risked setting in motion a divisive debate on state control of Franceís public services. Mr Jospinís Communist allies have frequently warned him it could split the ruling five-party coalition.

Yet, Mr Didier Destremau who was speaking in The Times chose to ignore his countryís ills with privatisation and lectured in his usual inimitable and arrogant style about what the Maltese government should be doing about privatisation.

The French government has been blowing hot and cold for two years on whether to act. Prior to the municipal elections, officials appeared confident the issue could be tackled despite strong union objections.

This confidence has since been eroded by the belief that at least part of the government partiesí poor election performance was due to voter disillusion over the lack of visibility of leftist policies.

The decision to postpone any action on Gaz de France was raised in press reports over the weekend and later confirmed by Jean-Jack Queyranne, the minister for parliamentary affairs.

Government officials have indicated that with little more than 100 days of parliamentary business left before the current five-year legislature ends early next year, there would not be enough time to give proper consideration to the bill.

The government had pencilled in discussion of the opening up of Gaz de Franceís capital for June along with legislation adapting French law to EU directives on gas liberalisation. At the end of March, Gaz de France had felt sufficiently encouraged about a change in its status to announce the appointment of Societe Generale as its adviser.

The government earlier on had made clear it would maintain a majority state control and only permit the entry of select partners. The potential French partners were signalled as TotalFinaElf, the Franco-Belgian oil group, and EdF, the giant French state electricity concern which operates joint services with Gaz de France. The one foreign partner mentioned was Norwayís Statoil.

Even this "Franco-French" solution was immediately rejected by the trade unions whose powerful grip on both Gaz de France and EdF gives them a big say in the future. Last week workers at the main gas storage sites in France staged stoppages to protest against "privatisation and deregulation".

France was late in adapting European Union directives on opening up the electricity market and is a year behind on the gas directives. Nevertheless since Gaz de France was obliged to accept the limited degree of deregulation last August, it is believed to have lost 5 per cent of its big volume clients.