Brussels, 20/02/2003 (Agence Europe) - Speaking in front of the EP's committee on economic and monetary affairs on 18 February, the competition Commissioner, Mario Monti, talked of the challenges ahead for competition policy. He was delighted with the negative decisions on taxation systems in Belgium, the Netherlands and Ireland (see EUROPE of 19 February, p. 15). It was, "economically the most significant of all the fifteen (tax) measures we investigated since July 2001", he stressed. "We want to make an effort to simplify procedures in areas with no risk of competition distortion, whilst cracking down on negative competition", he added. He showed resolve in fighting prejudicial taxation systems, and described as "childish" allegations from a financial publication accusing the Commission of bowing to pressure from member states by agreeing to a transitional period (up to 2010) for ending these schemes in exchange for an agreement on taxation of savings. This, he feels, "denotes a total misunderstanding of the substance". Mr Monti described 2002 as a "key year" for modernisation, marked by the implementation of "major reforms", particularly that of articles 81 and 82 of the Treaty (agreements and abuse of dominant position: regulation 17/62, henceforth regulation 1/2003), of the "mergers" regulation (4064/89), and the new regulation on distribution of motor vehicles. During the discussion, Benedetto Della Vedova (Lista Bonino) interrogated Mr Monti on the "efficiency criterion" the Commission will take into account during assessment of proposed mergers; as to state aid, expressed concerns about public television funding which, he claims, creates competition distortion. Mario Monti repeated that the efficiency criterion, which was solicited by companies, is something the Commission would be taking into account to authorise a merger. "Efficiency must be genuine, and the proof must be demonstrated by the parties", he declared. As to aid for public television companies, he pointed out that the Commission had already clarified its position in its communication of 17 October 2001, and that inquiries had been opened in Germany, Italy, France, the United Kingdom, Spain, Portugal, the Netherlands, Austria, Sweden, and Denmark. "There isn't an inquiry in every country, but not far off", he stated. According to Philippe Herzog (NGL, France), it was time for the Commission to pronounce on matters of services of general interest; Alexander Radwan (EPP, Germany) took up the subject, asking "for more concrete and comprehensible things" for sectors such as energy and postal services. "Services of general interest are always topical, and the Commission is always called upon to pronounce", Mr Monti answered, despite acknowledging that there was not unanimity within the Commission on this subject. On the question of taxation competition, Christoph Konrad (EPP, Germany), cautioned against naivety, stating: "we will need" tax competition between member states. As to distribution of motor vehicles, he observed that the new regulation had, in a short time, already shown "positive progress towards diversity". Mr Monti admitted the need for taxation competition. But there is "a line, unquestionably" between healthy and harmful competition, which must not be crossed. He stressed the fact that any positive decision on a request for exemption must be taken with the greatest of vigilance as "once the decision is taken, it cannot be changed (…) it is the Commission's intention to check all exemption", he confirmed. The President of the Parliamentary Commission, Christa Randzio-Plath (PES, Germany) asked "why employment is not a factor in merger decisions". Mr Monti recognised that he had "thought long and hard" about the issue, and had concluded that competition policy was not a general policy instrument. He added that revision of the notification forms, provided for in the reform, sent out a clear signal to companies on European and national rules supporting employer rights. "A merger can obviously bring about job losses, but (…) it could be the only way to keep a company afloat and thus maintain jobs in the long term", he said. Olle Schmidt (ELDR, Denmark) asked how the Commission planned to fight invisible cartels. "Our objective is to reveal them", stated Mr Monti, saying that cartels are, in fact, always invisible. The fight made even more important by the fact that sanctions against a cartel could lead national authorities to take specific measures obliging their companies to respect competition law, he added, quoting the example of the cartel between the Scandinavian airlines SAS and Maersk. Lastly, Claude Turmes (Greens/FTA, Luxembourg) put some sensitive questions on mergers within the energy sector. EUROPE will come back on this.