EU’s least enthusiastic liberaliser to take charge of market-opening drive

Date: 04/05/2000

By Simon Coss

IT IS an ironic state of affairs. The member state which will be tasked with overseeing the EU's liberalisation drive in the second half of this year is, to put it mildly, the least enthusiastic about the Union's market-opening credo.

While market pressures are forcing France Telecom and Electricité and Gaz de France into international commerce, the old Socialist in French Premier Lionel Jospin continues to play King Canute by ordering the tides to stop coming in.

At the Lisbon summit in March, an agreement to knock down the last obstacles to free EU utilities and transport markets was blocked by the man who would be French president in two years time.

Jospin called for energy and transport to be excluded from the list of liberalisation targets altogether, arguing that these sectors had nothing to do with encouraging e-commerce and the 'new economy'. Although he was isolated, Union leaders eventually agreed to abandon plans to set a fixed timetable for full market-opening in the transport and energy industry, simply pledging instead to "speed up" liberalisation.

France's stance on market-opening is typified by Transport Minister Jean-Claude Gayssot. The man who will be tasked with clinching agreement on a series of detailed measures to open up Europe's state-dominated rail networks to the chill winds of competition from July is French, a Communist and a former train driver.

Despite this, an agreement will almost certainly be struck. Gayssot will probably bluster and bluff for the benefit of the French media, but he will broker the deal. Indeed, being the seasoned French politician he is, he will no doubt present the agreement as a resounding victory for the land of Voltaire in the face of diabolical Anglo-Saxon pressure.

Gayssot will wrap up the rail talks because, in reality, the deal is all but done. He has managed to water down the Commission's original proposals considerably, but that battle ended when member states agreed in December last year to finalise detailed measures on network access by the end of 2000. Given that this accord has French fingerprints all over it, it seems unlikely that Gayssot will try to slow down the inevitable moves towards partial rail liberalisation any further.

France's attitude towards industrial liberalisation has always been somewhat schizophrenic. It is certainly true that the idea of exposing state utilities and transport companies to external competition has been a bit hard to swallow in the country that invented the term dirigisme - the concept of the state guiding development of the economy. But in those sectors which have already been liberalised, such as air travel, telecoms or electricity, there is no evidence of old state monopolies buckling under the strain.

Article forms part of a survey, 'Industrial liberalisation' It is an ironic state of affairs. The member state which will be tasked with overseeing the EU's liberalisation drive in the second half of this year is, to put it mildly, the least enthusiastic about the Union's market-opening credo.