PARIS Oct 2 Energy prices have little impact on
whether a country is a competitive exporter of manufactured
products, according to researchers at Brussels-based think tank
Electricity prices for corporate users have become a
political issue in the European Union. Employers' associations
blame Europe's widening power cost differential with shale-gas
rich U.S. for a loss of competitiveness.
The European Commission plans to present an analysis of EU
energy prices and their impact on competitiveness before the end
of this year. Its conclusions are expected to be discussed at a
February 2014 summit about industrial competitiveness.
The Breugel study found that during the 1990s and 2000s,
power price movements had little influence on European
countries' export market shares, but they can affect which
sector becomes more competitive. Those with low power prices,
for instance, will attract energy-intensive industries like
Most EU countries manipulate power prices through subsidies
or price caps, but to the extent that these subsidies are borne
by other parts of the economy, the competitiveness gain of the
energy-intensive industries might not be enough to compensate
for the competitiveness loss of other industries.
Georg Zachmann, one of the study's two authors, told Reuters
that countries with above-average energy prices are typically
better at selling a wide diversity of products and that these
products in general create more value and more jobs.
"Consequently, it is not a good idea to make successful
sectors pay higher taxes and levies in order to subsidise more
energy-intensive industries," he said.
Zachmann said the study shows that countries with high power
prices typically focus on high value-added products, making
power prices less relevant in the end price of the product.
Low energy prices prevent others from focusing on high-value
manufacturing because cheaper power encourages specialisation in
a few energy-intensive products, which are often low value
added, according to the Breugel researchers.
"We assert that there is no evidence that, in the long-term,
energy prices above the global average undermine the
productivity of export sectors," the study said.
Breugel researchers say the automotive sector illustrates
how little exports are affected by power prices.
In Germany, energy prices increased by 166 percent between
2001 and 2008. Over the same period, German net imports of
aluminium - increasingly used to replace steel in car
manufacturing - rose 242 percent and car exports rose 142
(Reporting by Geert De Clercq, editing by William Hardy)