European Commission President Romano Prodi has threatened serious consequences for France if it fails to open its energy markets to competition during Spain's six-month European Union presidency, which ends June 30. The threat came as EdF, France's nationalized electricity company, unveiled a restructuring plan that is contested by the powerful French power unions that see it as preparation for privatization.

Prodi and several European governments complain that state-owned EdF has taken shares in companies in the United Kingdom, Spain, Germany and Italy, but that the French energy market remains largely closed to outside investment.

France's socialist-led coalition is divided on EdF's future. Economy Minister Laurent Fabius favors partial privatization while other socialist ministers, the communists and the citizen's movement want to keep energy in public hands. The left-wing CGT union that represents a majority of EdF's employees opposes any watering-down of the state's ownership. The right-wing opposition favors privatization.

EdF has 31 million customers in France, 20 million outside France and annual sales of more than £21 billion. It plans to reorganize and cut costs to become more competitive and wants to form four regional branches, a production company, a sales organization and a business development section, each responsible for making its own profits.

Because France's presidential election begins in April and its general election in June, nothing is expected to happen until at least autumn.
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