Clarify and simplify. The European Commission's reform of the competition policy will be a profound one, not only in terms of the rules applicable to businesses (ban on cartels and abuses of dominant positions, checks on mergers, see this column the day before yesterday), but also in the field of State aid However, although the revision as it relates to businesses is already fully in force, new rules on aid will be phased in by the end of 2006. The Commission's document on this subject announced that over 2005 and 2006, the following will be renewed: a) all rules on exemptions (i.e. those exempting certain categories of aid from the ban); b) guidelines on regional aid; c) the framework for aid to research; d) guidelines on capital investment. Furthermore, guidelines for aid to environmental protection expire on 31 December 2007, at which point they will be renewed also; and as we know, the new programming of the Structural Funds, as part of the regional and cohesion policy, will enter into force in 2007. The Commission believes that these various elements "offer an unprecedented opportunity" to revise the whole thing, in two ways:
taking account of the Union's cross-cutting objectives, notably the Lisbon strategy and the new economic cohesion policy, which is already under discussion;
consolidating the rules and simplifying them wherever possible.
An instrument at the service of the economy. The reform will follow the general theme (already decided on for the rules for businesses), which is to place the competition policy within the framework of the general economic policy, as far as possible. Aid will be authorised if it makes a contribution towards the Union's economic objectives, which are, essentially: a) helping regions lagging behind to make progress (by promoting productivity and competitiveness rather than by subsidising inefficient businesses); b) developing research and innovation (especially private sector investment in research, Europe's Achilles heel compared to its main rivals in the world); c) facilitating the access of small and medium-sized enterprises to capital. For this reason, studies underway focus on such things as 1) the types of activity which could benefit from support to help the objective of devoting 3% of EU GDP on research, and desirable levels of aid to this end; 2) access to capital by SMEs in partnership with private investors, especially in their start-up phases; 3) analysis of market dysfunction affecting innovation.
Reducing bureaucracy. The Commission has paid particular attention to reducing the weight of bureaucracy in the rules. Notification of aid to SMEs and for training and employment will be phased out, or put under simplified procedures; The Commission will draw up an "assessment sheet" to identify aid which is unlikely to impact upon competition, the essential criterion being their level. State rescue and restructuring aid to struggling businesses (the field which has given rise to the most discussions, and also the most tension, at times) will be assessed mainly depending on the distortion and harm it could cause to the beneficiaries' rivals. An essentially economic assessment, in other words.
Mario Monti explains. These guidelines, however, do not herald the dawn of a lax policy: the objective remains that of reducing the overall volume of State aid, "whilst promoting cross-cutting aid of Community interest". In a speech in Paris to the "Europartners" group, chaired by Elisabeth Guigou, Mario Monti explained why, generally speaking, the volume of aid must fall. Support to inefficient businesses, which aren't making the efforts needed to address their problems, or those which engage in risky strategies are a dead weight on the States. Rescue and restructuring aid for business is useful and can save jobs, as long as the restructuring programmes are efficient. Mr Monti referred to the Air France case, which received aid in 19994 and which has become one of the most dynamic airlines, because it took rationalisation and restructuring measures. However, keeping a business alive artificially is still a negative operation, which might save jobs for a while, but will endanger the jobs and existence of well-run companies, to the detriment of society as a whole. The race for subsidies and the waste of public money are ruinous. The Commission, Mr Monti announced, is and will remain flexible for cross-cutting aid, for example to protect the environment and facilitate job creation, but will be incredibly strict elsewhere.
(F.R.)