Undeniable coherence. Nobody could claim that European Commissioner Frits Bolkestein lacks coherence, a logical sequence in his ideas or political courage. Convinced that radical economic liberalism is the way forward, indeed the only one for growth and good economic health, he is holding his course steady: all his initiatives and interventions go in this direction. For this alone, he deserves respect even from his political adversaries, because he shows his cards, he doesn't dissimulate, and he acts according to his principles. If I have ever had occasion to criticise him, it's for his reluctance to admit that other institutions of the EU could reach different conclusions to him on any given subject. Whenever the European Parliament fails to take the same stance, he tends to put it down to MEPs giving into indeterminate interests or lobby groups. He should accept the Community method (Commission's initiative, codecision by Council and Parliament) even when the result does not happen to coincide with his own views. Apart from this, criticism of the content of various of his initiatives take nothing away from the high esteem in which I hold his intellectual honesty.
As you may have gathered, I have a couple of reservations about two of the Commissioner's recent initiatives.
When does the fight against fraud become illicit? The first is a "reasoned opinion" he sent to the British government calling upon it to abolish the measures he views as excessive, to fight excise fraud on alcohol and tobacco in the UK (see our bulletin of 8 July, page 12). What do the British do? They let alcohol and tobacco for the traveller's personal use through free of excise duty, but seize these same goods if they appear to be intended for resale. In serious cases of repeated fraud giving rise to suspicions of illegal trade, even the vehicle can be temporarily sequestered. Mr Bolkestein feels that these practices run counter to the free movement of goods in the EU, because they dissuade the British from buying products on the other side of the Channel. I feel that his reasoning is flawed: those who buy tobacco and alcohol in full respect of the rules are allowed to pass freely through. What the UK is trying to deter is fraud, not the legitimate free circulation of goods. The way to resolve this lies in harmonising excise duty, not in pursuing anti-fraud measures (the details of which may indeed come under subsidiarity).
The specific nature of sport. A "reasoned opinion" was sent to Italy on tax measures to protect football clubs from bankruptcy (same bulletin, page 13). These measures allow losses linked to players' contracts to be amortised over ten years, even when the contracts were shorter than this. From the State aid point of view, Commissioner Monti entered no reservations, having obtained a few modifications. Mr Bolkestein is attacking them from an accounting standards point of view: the Italian system does not give the shareholders a "clear and accurate" view of the club's financial position. This seems to me to be debatable, because a clubs financial position is generally well known. Furthermore, only a very small number of football clubs are floated on the stock exchange. But the main issue lies in the specific nature of sport. This subject was long debated in the Council well before Mr Bolkestein arrived on the scene, following the unfortunate "Bosman ruling" by the Court of Justice, the negative effects of which on professional sport are increasingly coming to light Mr Bolkestein is now criticising the length of time of the amortisation, an almost irrelevant aspect compared, for example, to the enormous inequality of municipal, regional, and sometimes even national subsidies granted to sports clubs. The Commission wisely refused to get involved in this particular hornet's nest, because subsidies to other forms of spectacle could also be considered to create competition distortions: if the Paris Opéra or Milan's La Scala get more in subsidies than their rivals, they can afford the most expensive stars. This is not purely theoretical: I can assure you that t a few zealots have called for this in the past. Happily, this is not at all the view of either Ms Reding or Mr Monti. And I feel that Mr Bolkestein would be well advised to learn from them, and allow sport and culture to be given a helping hand by the powers that be, even if they also have an economic slant.
These two dossiers are relatively minor, but they show how the land lies. Also of significance is Mr Bolkestein's new initiative on company taxation (see our bulletin of 8 July, p.13), in favour of the harmonisation of the tax base but not of the rates, which confirms the intriguing suggestion of "reinforced co-operation" between the Member States wanting to move in this direction. This case deserves a comment all to itself.
(F.R.)