Your answer to question must be based on the text below which is entitled “The politics of power”:

The politics of power
Source: www.economist.co.uk
Feb 9th 2006 (Adapted)

There is an intense debate over the future of energy and its impact on Europe’s economy. On the one hand is a longstanding project for lower prices led by the European Commission designed to liberalize the market and enable producers and distributors to compete freely within and across national borders. On the other is a camp that argues with growing confidence against further freeing the market. In its view, long-term security and stable prices can best be preserved in managed national markets that are dominated by strong quasi-monopolistic companies which can withstand bullying producers and sudden shifts in demand and supply.

This tension has implications for businesses across Europe. Today business customers in different countries pay prices that vary as much as 100% across what is supposed to be a single European market. A freer market in energy promises to reduce prices back to something like a Europe-wide clearing level. Energy is a critical input to businesses, especially manufacturing, and rising prices are putting unwelcome pressure on already tight margins, as companies try to compete with emerging low-wage economies in Asia.

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