Commission and Commissioners to take position. Whilst we wait for the Heads of State to take position on the amended Lisbon Strategy next month, the Commission must try to convince the Member States, the European Parliament, the political parties and the social partners of the validity of its choices, making it as clear as it can how it intends to translate the outlines of its communication last week into reality. It's on the operational measures and concrete actions that the political battle takes on its full significance, because the real scope of the initial reactions is entirely relative. Those of the political groups of the EP were largely “knee-jerk reactions”. Even before President Barroso took the floor, you could predict that the EPP-ED group would react positively, that the Socialist group would voice grave misgivings on the respect for the balance between the three planks of the strategy and that the further to the Left you went, the more negative the reactions would be (and the more memorable also, because criticism is always more spectacular than praise, and it can get quite sarcastic when the speakers have the talent of a Daniel Cohn-Bendit or a Francis Wurtz).
It is against this backdrop of greater detail and shedding more light that in my view, the stances of Neelie Kroes on competition policy, of Günter Verheugen on various aspects of the industrial policy, of Danuta Hübner on regional policy, and more besides, can be found.
Ms Kroes's straight talking. You have to give it to Neelie Kroes. In the interview she gave to four European newspapers on 25 January, she held a few polemic aces over vice-president Verheugen. The Financial Times is not, in my view, the best place to look for sentences to quote, because it doesn't tend to publish classic-style interviews with answers in quotation marks. I will turn instead to “Les Echos”, in which the following passage is the answer to a question on the aim (attributed to Günter Verheugen) to modify the regulation on vehicle distribution: (our translation): “Let me be quite frank: I am the Commissioner for Competition (…). Günter Verheugen is a good colleague, he is in charge of industry and he already has much to do. There is no question of touching the car distribution regime”. That said, she has said that in general, she is “open to discussion” with her colleagues, and named many names. This little hitch was subsequently smoothed over, Ms Kroes and Mr Verheugen explained that they get on perfectly and a few newspapers talked about 50 tulips given by the latter to the former, the spectacular bouquet the centrepiece of her office. Mind you, the “question/answer” exercise between the two Commissioners is but a very small part of what Ms Kroes has had to say about State aid.
A few guidelines. First of all, the aid dossier must be taken in the context of the competition policy as a whole. State aid is the only part of this policy the man previously in charge of it, Mario Monti, failed to change. For the other aspects (illegal agreements, abuse of dominant position, mergers), Ms Kroes declared explicitly that she feels that the instruments she has are entirely satisfactory and “certainly do not need to be changed”. At most, efforts could be continued to speed procedures up: “being less bureaucratic, certainly”.
As for the content of the policy she intends to pursue with the new instruments, Ms Kroes announced three guidelines: a) not defending “national champions”, which she feels is an outdated concept; b) making sure, in sectors which have already been liberalised such as energy and transport, that old regulatory barriers are not replaced by abusive practices such as cartels; c) intervening on the financial services market if it becomes apparent that certain Member States are unduly protecting their national market by making it harder for foreign banks to set up. These guidelines need not be codified into policies; the Commission will apply them as part of its normal management. Due to the “Monti reform”, the Commission has offloaded the highly bureaucratic and pretty pointless obligatory notification scheme for all mergers, which was clogging its services with thousands and thousands of insignificant dossiers. These services can now concentrate their efforts, using the new, sharper instruments at their disposal, on high-risk sectors, on genuinely harmful cartels and secret market abuses, which are never notified by the perpetrators (for obvious reasons). All of this, obviously, comes under the control of the Court of Justice.
Personal situation clarified. Let's leave aside the “national champions” issue, (which is more a question of presentation and semantics), which Ms Kroes said is unlikely to shock anyone. It will all depend on how the individual dossiers are managed. What, on the other hand, is new, is the way in which she deflated the excessive misgivings about her personal situation, which came to light due to the numerous positions of responsibility she had previously held in the private sector. She was able to announce that scarcely eight dossiers out of a thousand being examined would be precluded due to a potential “conflict of interest” between her current duties and her past activities. This is good news, because it's unreasonable to think that having been a board member of or a consultant to a company yesterday would prevent her from being able objectively to examine the competitive behaviour of that company today. What would have been unacceptable is the risk that the rules she has self-imposed would distance her from a considerable number of cases under the microscope. If that had been the case, she would have been a “downscaled Commissioner”. But eight cases out of a thousand is negligible.
Guidelines for State aid. The State aid situation is a different kettle of fish altogether, because for so many years now, reform has been desperately needed. The Commission's services have been looking at this for a long time, lengthy and in-depth preparatory work has been carried out, the essential guidelines have been defined, but Mario Monti did not have time to finish it. Ms Kroes shares the view that reform is vital: “things cannot go on as they were”, she said, announcing her intentions of submitting her draft to the College “before the summer”. She did not touch upon the technical contents of the new regulations being drawn up, which are many and complex and point to a fairly radical simplification, with diversified rules depending on the categories of aid and including, in particular, a financial threshold below which aid will not even be notified. The new Commissioner stated three principles: : a) in the prosperous countries, there should be an end to regional aid, at least above a certain amount, even if, individually, some of their regions lag behind; b) the emphasis should be placed upon aid to research, innovation and sustainable development in general, which are essential to put the Union's competitiveness back on a solid footing and to make the Lisbon Strategy a reality; c) particular attention must go to small and medium-sized enterprises (which are, by far, the largest employers in the Union), by no longer artificially keeping alive the mastodons which devour everybody's money and which, with a few exceptions, do not create stable jobs.
State aid: not to be confused with European regional funding. The last point got the most reactions, due largely to an ambiguity which caused misunderstandings and confusion. Much of the media understood that Ms Kroes was referring to the subsidies of the cohesion policy of the Union, and that she was thus announcing the end to all European funding of less-favoured regions of the Union within Member States which were considered prosperous. However, Ms Kroes has no competence in this field; she was referring to Member States' national aid, which must be authorised by the Commission; this has nothing to do with the Community budget. It is another Commissioner altogether, Danuta Hübner, who is in charge of this. Several politicians, including MEPs and even Commissioners fell into the trap, and reactions were strong in the capitals which thought they were losing both European funding and the possibility of channelling national aid into their least-favoured regions (think of the Italian Mezzogiorno, which still has its handicaps, whereas other parts of the Union, which started out even more disadvantaged, have made brilliant progress in their development).
The debate took on considerable proportions, to the point at which President Barroso stressed that: -the Commission had not even discussed regional aid and funding, but there are certain broad outlines to be defined in common; -the cohesion policy is more than just a transfer of resources from the prosperous countries to the others (which, we know, corresponds to the view of the United Kingdom and a few other Member States, which would prefer to remove the common policy in this field and return all power to national level). The Commission spokesperson summed up the President's doctrine on this controversial point thus: “the EU helps its struggling regions wherever they are, in a prosperous or a less prosperous country. This is the concept of solidarity; if this is lost, the Union will slide towards the re-nationalisation of the cohesion policy”. See our bulletin of 5 February, p.8, for the “consultations” between the Commission and the Member States in these fields.
Ms Kroes's stances also involved various aspects of the industrial policy, especially in her reference to the “national champions”; I intend to come back to this and to industrial policy in general. As we can see, these are all issues which directly involve the Lisbon Strategy and which will influence the lives of the citizens, the future of our cities and countryside, Europe's place in the world. It is far preferable to examine them in as much detail as possible, limiting the declarations of principle dictated by the respective political positions, excommunications and anathema.
(F.R.)