27 June 2007

The End of Competition Part 2

More on the politics of the Brussels summit. I have found a press conference held by President Sarkozy which is illuminating and I am just translating the juicy sound bites here.

In his speech, speech the President made the following comments:
“we have obtained a major reorientation on the objectives of the Union. Competition is no longer an objective of the Union or an end in itself, but a means to serve the internal market.’

‘the place of public services in Europe has been recognised and consecrated by a protocol that specifies that they play a major role, that the Europeans are attached to them and that their organisation is first and foremost, for the Member States. It is for another place to place this in harmony with competition, as a means and not an end in itself.

In the Q&A this exchange is interesting:

Question: To return to the objectives of the EU, on competition and the protection of citizens: what do these changes mean exactly in the daily life of the French and or the Europeans?

Answer: This perhaps gives a little more humanity to Europe. Because as an ideology, as dogma, what did competition give to Europe? It has give less and less to the people who vote at the European elections, and less and less to the people who believe in Europe. There was perhaps a need to reflect. I believe in competition, I believe in markets, but I believe in competition as a means and not an end in itself. This may also give a different legal direction to the Commission. That of a competition that is there to support the emergence of European champions, to carry out a true industrial policy. ….

It was not a question of making an economic Treaty or a liberal Treaty and explain it to the citizen. It was a question of turning our backs to ideology, dogma ad naivety.

Therefore, of course we can consider this doing politics. But precisely because we are political leaders, and it is perhaps because we have not done enough politics in Europe that we find ourselves in a Europe that people do not recognise themselves in anymore. From this perspective, I put pressed, with my friends, that France and The Netherlands were not late, that what happened to us could happen to others. In fact I find that [our decision] is an extremely important awakening. We are in a country which voted ‘no’ and it was a way of saying to our colleagues and friends in Europe: ‘wake up, you must see things differently.’ We have shown that this was possible even among 27 [member states] without leaving anyone behind…

The Commissioner for competition did not quite see eye to eye with these assertions.

Statement by European Commissioner for Competition Neelie Kroes on results of June 21-22 European Council - Protocol on Internal Market and Competition
An Internal Market without competition rules would be an empty shell - nice words, but no concrete results.
The Protocol on Internal Market and Competition agreed at the European Council clearly repeats that competition policy is fundamental to the Internal Market. It retains the existing competition rules which have served us so well for 50 years. It re-confirms the European Commission's duties as the independent competition enforcement authority for Europe.
Now I would like to get back to the job. The Commission will continue to enforce Europe's competition rules firmly and fairly: to bust cartels and monopolies, to vet mergers, to control state subsidies. That is in the interests of our Internal Market. It is in the interests of European citizens and consumers, it is what Europe's business community quite rightly expects and deserves, and it is a firm foundation for Europe's prosperity, notably by ensuring fair conditions for international investment.


Rodrigo said...

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Muhseen said...

Diluting competition in the treaty is absurd. Europe was built as an economic union and in essence it is economic benefits derived from the union which underpin the political reasons for its existence. Each member state from a political point of view is most swayed to be in the EU for economic reasons, especially the big guns, UK, France, Germany, who can stand on their own politically on the world stage.

The Court has worked hard in establishing, defining, and enshrining competition throughout EU law, what happens to all of that now? Does the Court dilute it as the treaty suggests? or most likely does the Court work around it. Structurally the internal market is still evolving. Without competition there is no market. State based/state planned economies such as France are antithetical to an internal market of competition.

Politically what Sarkozy appears to be saying is that some of us in Europe have major issues with dealing with globalization and competition. France and others feel the effects of globalization but are not yet ready to take it on. Jobs are moving abroad. At the end of the day for Sarkozy and politics, doing more politics, means doing more to ensure job security, which in turn = votes. Therefore, in the short term competition doesn't sit comfortably with dated economic structure which some members in Europe don't want to get out of. Competition is seen as a factor in extenuating jobs losses, which results in loss of votes. That's one of the political messages I see from this.

Anonymous said...

I was wondering whether you will post an update to the Microsoft case. I just bought your book and was reading chapter 6, which of course is written before the CFI handed down its judgement a couple of weeks ago. Thanks