EU grip on competition weakened

Date: 26/06/1997

By Chris Johnstone

SPEAKING to Euro MPs in Brussels as the Intergovernmental Conference negotiators locked horns, Competition Commissioner Karel van Miert conceded that he might emerge a loser from the process.

“I cannot avoid the horse-trading that might eventually take place,” he said.

In the event, his worst fears were confirmed. Across the board, from public services to broadcasting and German saving banks, the summit delivered defeats for Van Miert and his under-strength Directorate-General for competition (DGIV).

With one treaty amendment and two declarations against him, Van Miert has emerged weaker from Amsterdam. Only time will tell how much.

One of the few bright spots he might reflect on is the fact that before the summit began, Germany dropped its call for the Commission's merger task force to be replaced by an independent European authority.

But despite stiff opposition from a handful of countries, EU leaders adopted a declaration proposed by Germany aimed at stopping DGIV from interfering in the affairs of its regional and local savings banks.

They followed this up with another aimed at giving similar protection to broadcasters' public service undertakings.

The phrasing gives some hope, however, that the Commission will still be able to challenge their other activities if they affect fair competition and trade across EU borders.

Perhaps the cruellest blow of all will emerge from a rather woolly article on services of general interest which was injected into the treaty at French insistence. It calls on the Union and governments to ensure that services of general interest (better know as public services) are able to fulfil their duties.

Opponents of this addition warn that it will allow governments to write - or rewrite - mission statements for their public services, which the Commission will have to accept or face the embarrassment of a court challenge.

They fear such statements could be used to frustrate Van Miert when he pushes for market opening in new sectors or even lead to the clock being turned back on past successes.

It could have been worse. Originally, the French were calling for a redrafting of the treaty's Article 90, which sets out the careful balance between allowing public services the scope to carry out their activities and preventing them from crowding out and hampering private companies in the same or allied sectors.

The final wording of the new Amsterdam Article 7d states that the EU and member states “shall take care that such (general economic interest) services operate on the basis of principles and conditions which enable them to fulfil their missions”.

An accompanying declaration adds that the new article will be implemented with full respect for European Court of Justice decisions “and as regards the principles of equality of treatment, quality and continuity of such services”.

The moves on banks and public service television and radio were also watered down, with the earlier bids for legally binding protocols diluted in the end to non-binding declarations.

An earlier proposal on broadcasting would have excluded all activities by public sector companies from Commission scrutiny, whether they were carrying out public service mandates or money-making operations which blatantly clashed with those of private rivals.

The failure of this proposition allowed the German private broadcasters' lobby to greet the summit outcome as a defeat for the public sector.

Commission insiders acknowledge they will have to tread carefully when public service broadcasting issues are raised in future, but add that the main intention was to set out where the EU stands if competition cases eventually land up in the ECJ.

The Banking Federation of the European Union said replacing the protocol with a declaration was good news. But Van Miert warned before the summit that any discrimination between public and private banks throughout Europe would undermine Commission attempts to clamp down on state subsidies in the sector.

ENDS 645 words