British believe one of the single market pillars is threatened. Reactions to the European Council's decision not to maintain the notion of “free and undistorted competition” among the Union's aims, by transferring it to a protocol, confirm that the debate on the substance of European economic policies has now begun. Reassuring explanations making this more of a symbolic initiative (see yesterday's column), have not, however, reassured those who see this as a sign. British financial circles do not see it as a clear-cut issue: “words are weighed” and, in this case, they alter in their eyes the objectives of the European project and are detrimental to the essence of the single market, which constitutes the main EU success and the source of its legitimacy in the business world. Although not explicitly citing the “intellectual displacement” of competition accepted by Tony Blair, Alistair Darling, the new Chancellor of the Exchequer, ironically pointed out that the French had used the concept of “economic patriotism” to defend Danone against a PepsiCo takeover bid two years previously, saying he failed to understand how yoghurt could be considered a strategic industrial product. In Mr Darling's view, there is no product and no industrial sector that is essential to our way of life and whose protection would be justified. He believes, on the other hand, that the City of London plays a very special role in his country, and that it should not be compromised by a tax either on the private equity sector or on operators who work in the City but who have a tax residence abroad.
Nicolas Sarkozy says … Mr Darling's comments were not only in response to the left wing of his party but also and above all to the guidelines set out by Nicolas Sarkozy. The French president does not surround his idea of Europe's industrial, competition and monetary policy in mystery or riddles. He has issued several declarations, given several interviews and set out his views in two highly mediatised speeches in France, one on 23 June at the Bourget Air Show, and the other on 1 July at the Palais des Congrès in Strasbourg. Here are just a few elements relating to the policies mentioned.
Mr Sarkozy does not speak of “economic patriotism” in the national sense but rather of European patriotism. His lightening operation on competition was essentially aimed at third country competition, which in his view is sometimes abnormal. He calls for a “Europe that gives itself the means to act and to protect itself”; saying competition “must not be the only perspective for European policies” and must not prevent states from saving their enterprises. Europe must be able to “act against dumping, establish a Community preference, implement industrial policies” and no longer “dilute itself in unending enlargement”. Some of his statements provoke and astonish, for example: “Naivety is over, reciprocity begins (…) You want Europe to open up its markets? Well, we shall open them - as soon as you open yours”. And he suggests there should be reflection on a sort of differentiated taxation towards imported products “with the same freedom of interpretation as those that our American, Chinese, Indian or Brazilian friends allow themselves”. France does not intend to impose its views but rather discuss them with its partners, in a Community framework.
The monetary question is seen by Mr Sarkozy in the same spirit: the EMU (Economic and Monetary Union) must manage its currency according to the criteria used elsewhere, that is, to the service of the economy: “We have not created the second world currency so that we can no longer build a single aircraft on European soil” because of the depreciation of the dollar (“costs of European manufacturers are in euros but they sell in dollars”). Still citing Sarkozy: “I want us to do with the euro what the Americans do with the dollar, the Chinese with the yuan, the Japanese with the yen, our English friends with the pound (…). We cannot be the only area in the world where the currency is to the service of growth”.
Mr Sarkozy's intentions concerning the responsibility of the state in corporate management in essential areas such as energy and aeronautics are just as explicit. He did not beat about the bush over EADS (for the Airbus), Electricité de France, Gaz de France, and, from an explicitly European angle, about the defence industry.
As one can see, departure positions are well defined. How do industrial circles react at European level? I shall set out a few indications on this in my next commentary in the light of a meeting recently organised by the employers' group at the Economic and Social Committee. (F.R.)