The only possible conclusion to the informal debate on “economic nationalism” within the Union at the EU Economy/Finance Council in Vienna on 8 April was unanimous condemnation of protectionism in Europe and a call for markets to be opened and deregulated (see bulletin 9171). Who could have expected anything else? What is important is not this semi-official message, but the statements and stances that went with it, and from which I will draw three conclusions.
1. Rejection of Gordon Brown's suggestion on creating a further European body to assist the European Commission in monitoring economic sectors (with energy at the top of the list) where market opening and competition are not all they could be. Those who said the British Chancellor was seeking to relaunch the plan for a European competition authority, separate from Community institutions, exaggerated the point somewhat; more modestly, Mr Brown restricted himself to suggesting that a group of independent experts advise the Commission in its vigilance against the emergence of protectionism. The reaction of the Commissioner Joaquin Almunia (speaking, too, on behalf of his colleague with responsibility for competition Neelie Kroes) was, logically, negative and found support, notably from the French Minister Thierry Breton. Italian Minister Giulio Tremonti quoted the British philosopher and theologian William of Ockham's razor, according to which, if there are various possible solutions, the simplest must be chosen. Overall, the idea of an additional European body, which would increase Community bureaucracy, did not receive support, and the autonomy of the Commission was reaffirmed (see too the following point).
2. Support for the Commission's actions. The European Commission initiatives to have the principles of the unified market adhered to in all Member States found several supporters. Not one Minister criticised the avalanche of infringement procedures (around 2000!) opened recently for insufficient or incomplete application of European measures on the free circulation of capital and opening of markets. These procedures affect about seventeen Member States, and one might have expected that one of them might have thought it was going a bit far, especially given that some procedures were thought to be unjustified in the capitals concerned. But nothing of the sort. Thierry Breton stressed to the press that the Commission “does its job, and does it rather well”. So all the governments, apart from one or two sporadic displays of bad temper, are aware that Commission monitoring is indispensable: it makes them each feel protected from possible abuses from neighbours.
3. For a few partial exceptions to the “laws of the market”. The above considerations do not mean, however, that all Member States follow exactly the same line on exclusive application of the laws of the market in all sectors and are against any intervention by public authorities in the opening of markets, takeover bids or mergers. I recently commented in this column (bulletin 9164) on the partly contradictory stances taken on this by the president of the euro-groupe Jean-Claude Juncker, European Commissioner Joaquin Almunia, and former Board member of the European Central Bank Tommaso Padoa-Schioppa. At the Vienna meeting, Thierry Breton stated that in three sectors, agriculture, water and energy, the application pure and simple of the laws of the market were not enough. These are the “quite special” areas, where the principles of the free market must be combined with the criterion of security of supply and environmental requirements. For energy in particular, free movement of capital, the need for competitive prices and security of supply represent “a triptych, no element of which must be favoured to the detriment of the others”. As for relations with the world beyond, the French Minister stressed that Europe was one of the least protectionist continents, adding that one must not be naïve about globalisation. The statements from Mr Juncker, Mr Padoa-Schioppa and now the French government are part of a great debate that Europe cannot avoid.
In conclusion let me point out the unanimous praise for the way Karl-Heinz Grasser handled the discussion. The young Austrian Minister will chair the June Ecofin Council, at which these various issues (and others) will be taken up again. Is this the beginning of a new generation of European leaders?
(F.R.)