"The CEO of EDF calls for a 20% increase of electricity prices over three years"
Here is a title of an article in Le Monde dated 8 July 2009.
EDF needs money, so capital to grow. Nothing could be more natural for a company, shareholders are required to have development. Indeed, EDF has implemented the UK and U.S. markets and plans to build his famous EPR plants in China.
His projects require money.
EDF launches his loan at a rate of 4.5% over five years.
is logical and normal. A company borrows money to invest and create wealth.
And suddenly the CEO of EDF said it must increase the electricity tariff, because EDF is still in need of money.
I cite an article in Les Echos said that the financial situation of EDF:
" EDF is facing an explosion of leverage: As the very large acquisitions, it rose by 50% nothing in 2008 to $ 24.5 billion at year-end ".
In summary EDF is in debt, the money she borrowed is not enough.
EDF CEO says very clearly that this increase is justified because the rates charged by EDF are 30 to 40% cheaper than those in other European countries (Liberation).
Conclusion: the French citizen pays an electricity rebate.
How is set the price of that electricity? According
Christine Lagarde, for her, her colleague Borlo, and a council of guys I do not know what. Finally, to summarize, the state is the majority shareholder of the company and it sets prices.
This raises the question of pricing.
St. Thomas Aquinas said (the class, we move from EDF at St. Thomas Aquinas) that God alone could just fix the price of things.
long time there has always been the question of how to set a price that is fair to boot.
The formation of a prize is a complex process that involves the law of supply and demand . More property is required and there is less available or offered its price will rise and vice versa.
In fact the process of price formation is so complex that only God could know what the right price. Ie it should be omniscient. And no one is omniscient.
If I am a manufacturer of pencils, and the price of wood increases (because the wood is in short supply this year or new manufacturers have tables on the market needs the same wood as the amount of Wood does not vary, so it's the highest bidder who will buy the wood, etc. ....) I have to raise the price of my pencils, (unless I develop a new manufacturing process for pencils that will lower its price unless it is a competitor to do etc. ..).
Somewhere while prices are linked in an economy and it involves millions and millions of players, which means that no mind to it alone can not cover that amount of information.
The only way to remedy this ignorance, is the free market, which is closer and closer to transmit information that allows the formation of a prize (I will return to the excellent emission Milton Friedman , click here ).
But here, in France the price liberalization is not complete.
There are many prices are set by the men of the state, such as electricity, gas, insurance, pensions, minimum wage and many more ....
Men of the State they are omniscient? The answer is obviously no. But they claim to be, through ignorance of economic facts some , judiciously for other ( it is immediately less cool )
Probably the electricity price should increase, and they would increase if they obeyed the laws of the market. But the consumer would be penalized as well as other sectors. In fact the money allocated to this increase in electricity prices would no longer be allocated to other positions (imagine flat screens). So the seller of flat panel displays could face a crisis.
To avoid this it would liberalize the other awards, some of which would decline and then offset the increase in electricity.
For example: the price of social contributions for sickness and old age a price much higher than those of other European countries.
In summary we should let it evolve prices freely.
Unfortunately sudden liberalization prices would lead to such a change there would be many disgruntled people and the state governments, MPs, senators would risk their seats next election.
So it is unlikely they would do that, unless you are facing a major crisis that requires strong measures, as with Thatcher or during the sudden liberalization of the USSR (or at the famous corner of Liberal Mitterand in 83).
We are in a situation where many landmarks are distorted. A situation where prices were fixed by suddenly and arbitrarily. A situation where we played the sorcerer's apprentice by defying some laws.
The only way to find the right Electricity Prices EDF is to liberalize.
What is sad in this case, it's power to claim any deal with men of the State are in impossible situations.
EDF needs money, so capital to grow. Nothing could be more natural for a company, shareholders are required to have development. Indeed, EDF has implemented the UK and U.S. markets and plans to build his famous EPR plants in China.
His projects require money.
EDF launches his loan at a rate of 4.5% over five years.
is logical and normal. A company borrows money to invest and create wealth.
And suddenly the CEO of EDF said it must increase the electricity tariff, because EDF is still in need of money.
I cite an article in Les Echos said that the financial situation of EDF:
" EDF is facing an explosion of leverage: As the very large acquisitions, it rose by 50% nothing in 2008 to $ 24.5 billion at year-end ".
In summary EDF is in debt, the money she borrowed is not enough.
EDF CEO says very clearly that this increase is justified because the rates charged by EDF are 30 to 40% cheaper than those in other European countries (Liberation).
Conclusion: the French citizen pays an electricity rebate.
How is set the price of that electricity? According
Christine Lagarde, for her, her colleague Borlo, and a council of guys I do not know what. Finally, to summarize, the state is the majority shareholder of the company and it sets prices.
This raises the question of pricing.
St. Thomas Aquinas said (the class, we move from EDF at St. Thomas Aquinas) that God alone could just fix the price of things.
long time there has always been the question of how to set a price that is fair to boot.
The formation of a prize is a complex process that involves the law of supply and demand . More property is required and there is less available or offered its price will rise and vice versa.
In fact the process of price formation is so complex that only God could know what the right price. Ie it should be omniscient. And no one is omniscient.
If I am a manufacturer of pencils, and the price of wood increases (because the wood is in short supply this year or new manufacturers have tables on the market needs the same wood as the amount of Wood does not vary, so it's the highest bidder who will buy the wood, etc. ....) I have to raise the price of my pencils, (unless I develop a new manufacturing process for pencils that will lower its price unless it is a competitor to do etc. ..).
Somewhere while prices are linked in an economy and it involves millions and millions of players, which means that no mind to it alone can not cover that amount of information.
The only way to remedy this ignorance, is the free market, which is closer and closer to transmit information that allows the formation of a prize (I will return to the excellent emission Milton Friedman , click here ).
But here, in France the price liberalization is not complete.
There are many prices are set by the men of the state, such as electricity, gas, insurance, pensions, minimum wage and many more ....
Men of the State they are omniscient? The answer is obviously no. But they claim to be, through ignorance of economic facts some , judiciously for other ( it is immediately less cool )
Probably the electricity price should increase, and they would increase if they obeyed the laws of the market. But the consumer would be penalized as well as other sectors. In fact the money allocated to this increase in electricity prices would no longer be allocated to other positions (imagine flat screens). So the seller of flat panel displays could face a crisis.
To avoid this it would liberalize the other awards, some of which would decline and then offset the increase in electricity.
For example: the price of social contributions for sickness and old age a price much higher than those of other European countries.
In summary we should let it evolve prices freely.
Unfortunately sudden liberalization prices would lead to such a change there would be many disgruntled people and the state governments, MPs, senators would risk their seats next election.
So it is unlikely they would do that, unless you are facing a major crisis that requires strong measures, as with Thatcher or during the sudden liberalization of the USSR (or at the famous corner of Liberal Mitterand in 83).
We are in a situation where many landmarks are distorted. A situation where prices were fixed by suddenly and arbitrarily. A situation where we played the sorcerer's apprentice by defying some laws.
The only way to find the right Electricity Prices EDF is to liberalize.
What is sad in this case, it's power to claim any deal with men of the State are in impossible situations.
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