The EU Commission is taking an action against the Government in the European Court of Justice over its failure to compel State companies to change the way they present their annual accounts.
The action comes almost 18 months after the Government was required by the Commission to introduce legislation requiring semi-states to produce accounts that would show whether monopoly profits are being used to cross-subsidise the parts of their businesses which are open to competition.
The Commission noted that it had reminded the Government of its obligations on three occasions since the deadline passed.
The governments in Finland, France, Italy, Portugal and Sweden face similar actions by the Commission, which moved last week to initiate court proceedings. The Commission also took separate but related actions against Belgium and Luxembourg.
There was no immediate response last night from the Government. While such cases are almost inevitably slow-moving, a successful action in the European Court would oblige major Irish semi-states such as the ESB, Bord Gáis, An Post and CIÉ to provide additional information in their annual accounts.
None of these groups was cited yesterday by the Commission but all operate in markets which are being opened, at various rates, to the private sector.
All have been subject to criticism, in varying degrees, by private sector rivals, who argue that they have constrained competition.
But while some are already obliged to provide separated accounts to their regulators, these are not generally published. Thus rival firms operating in competitive markets are likely to welcome new accounting requirements.
The separated accounts sought by the EU would distinguish between the financial performance of monopoly operations and parts of their business which are open to competition.
Closely guarded by all businesses, such information is a crucial tool for analysing the finances of any firm.
It would generally be expected to link capital and current expenditure in different business units with revenues, shedding light on profit rates. This would lift the lid on the real state of affairs in many companies.
But the Commission is seeking publication of such accounts for semi-state groups to enable it to examine whether state firms use monopoly profits to cross-subsidise parts of the business which are open to competition.
In addition, the Commission said separated accounts would provide member-states with a tool to verify that public resources to finance essential public services "are not used to distort competition".
The Commission said: "Using public funds to distort competition breaches the key principle according to which companies that receive state funding for services of general interest cannot use these resources to subsidise activities open to competition.
"This is especially true for newly liberalised sectors where emerging competition is still vulnerable."
