(PARIS) - The EU needs greater competition in its energy markets to deliver lower prices to consumers and make energy supplies more secure, the OECD said Thursday in an economic survey of the European Union.

The call echoed proposals made this week by the European Commission for major gas and electricity suppliers to give up their power grids and gas pipelines in the hope of infusing more competition into the sector.

The OECD said that "the network needs to be effectively separated from the generation and supply activities and national markets should be linked together better to create regional or pan-European energy markets."

"The EU's recent Energy Policy for Europe is an important step in the right direction," the Paris-based economic research body said in the report, which also called for more competition in telecoms, transport, ports and postal services in the 27-nation bloc.

But it noted that the energy sector is an area where there has been a tendency to try to protect national companies.

This highlights "a clash in view between those who believe that national energy champions are the best way to guarantee a secure supply of energy and to retain some buying power over foreign suppliers, and those who argue that a liberalised, integrated European market is not only more efficient but is also more secure."

The OECD report did not specifically mention France's tie-up earlier this month of Suez and state-owned Gaz de France to create a world energy champion in a sector that Paris was eager to protect from foreigners.

The Organisation for Economic Cooperation and Development (OECD) said that the European sectors that have been liberalised the most, such as air transport and telecoms, have delivered lower prices and better service for consumers and other firms alike.

The report was the OECD's first economic survey of the European Union. It assesses the effectiveness of EU-wide policies in boosting growth and living standards among member countries.

It looks at the progress towards a single market and sets out the reforms necessary to open up energy and other network industries, improve cross-border worker mobility and make regional and agricultural policies more effective.

The OECD is a Paris-based institution with a membership of 30 leading developed countries. It does research for its member countries and issues advice to policymakers.

Further details - OECD

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