The share price in Scottish Power rose yesterday on speculation that RWE would make a bid for it. There is no doubt that with 240m customers in Europe the two German utilities see that economies of scale are the way forward. RWE has diversified into water and telecoms but has realised the errors of its ways, and is looking to sell Thames water.

E.On have been progressing with the takeover of Endessa a spanish utility. This has run into problems as the Spaniards look to protect their national industries. Ironically, the EU has stepped in to stop the anti-competitive behaviour of the regulator, but then is also likely to look at anti-competitive behaviour as a result of the monopoly that will be created. The Germans are not regulated, apart from by the EU, and it appears that they are allowed to buy up other utilities outside of their own country with little resistance.  When the likes of Powergen and National Power looked to do this ten years ago they were prevented.

Deregulation in the UK started in 1989, and was encouraged across Europe in 1996. So it seems grossly unfair and wrong that in both Germany and France full de-regulation will not be completed until 2007 a full 9 years after the UK and Norway (which is not part of the EU 25).