"The battle between companies' strong appetite for cross-border acquisitions and governments' political agendas, increased regulatory transparency, environmental debate and supply security issues are expected to continue to dominate the market in 2007," comments Francesca Fraulo, Director in Fitch's Energy and Utilities team based in Milan.
The governments' desire to balance the needs of customers and the strength of their national champions has been given a new urgency by the current high hydrocarbon price and the increasing reliance on Russia and the Middle East to cover energy needs. Germany has secured a share of the Russian gas supply via its participation in the development of a new pipeline connecting Germany with Russia through the Baltic Sea. France's national energy independence is secured through its vast nuclear programme. In Italy, the increasing dependence on gas is a high priority with the government, which seems strongly committed to the development of new infrastructure to expand import capacity.
The report also comments on the increasing regulatory pressure in Germany and France, which will help increase transparency and competition in the sector but has yet to affect the energy companies' credit ratings.
The full report, "Italy, France, Germany Utility Credit Outlook 2007", is freely available on Fitch's website www.fitchratings.com
