German state chief calls for end to EU power monopoly

Date: 15/03/01

By Simon Taylor

THE leader of Germany's wealthiest federal state has called for a radical shift in power from central EU institutions to national and regional governments.

Wolfgang Clement, premier of North-Rhine Westphalia, said EU institutions should be stripped of their monopoly over key policies including regional aid and internal market rules.

Clement, who is thought to have the support of fellow Social Democrat Chancellor Gerhard Schröder, also revived calls for the European Commission to hand over its responsibility for cross-border competition cases to an independent anti-trust authority.

Speaking at a reception in Brussels hosted by the state, Clement said his vision would boost the EU institutions' reputation, which had suffered from a tendency to expand their power and interfere with regional authorities' core responsibilities.

"The European institutions have ended up extending their competences into most areas of policy," he said.

To tackle this problem, he argues that the EU should have decision-making powers only in certain fields, such as foreign policy, external economic policy, company taxation and immigration. In other areas, such as single market rules, the Union should only decide fundamental principles and leave it to national and local authorities to decide how to apply them.

But some member states will see this proposal as an invitation to regional authorities to avoid complying with EU laws that prevent them from bailing out ailing industries.

Clement takes the example of regional policy to illustrate the most pressing problems. "The German Bundesländer have almost no room to manoeuvre any more in the area of structural policy," he claims, while highlighting what he calls the "breathtaking and strength-sapping bureaucracy" needed to ensure that criteria for central funds are met.

"The first thing I would like to get rid of is the financial merry-go-round between the rich member states and the EU."

Clement also argues that member states with standards of living above a certain level should no longer receive regional funds - a controversial proposal which would provoke opposition from countries such as Spain which receive more in structural funds than they pay into the Union's coffers.

Instead he says regional policy should become a direct transfer from richer to poorer member states under rules policed by the Commission. In return, national and regional governments could decide which areas should receive structural aid.

Clement's bold comments, which are being seen by some as a preview of German Länder demands at the next intergovernmental conference in 2004, have been criticised by other EU leaders. They believe such moves risk eroding the achievements of the Union in agreeing common rules.

"In my view this would be a step back," said Dick Benschop, Dutch state secretary for European affairs. "We would end up with less Europe but with a less effective Europe."

Schröder won a pledge from other EU leaders at last year's Nice summit to take a hard look at power-sharing within the Union in the run-up to the next treaty. The Länder want a definition of power-sharing to tackle what they see as Brussels' dominance over sensitive subjects such as support to banks and declining local industries.

The leader of Germany's wealthiest federal state has called for a radical shift in power from central EU institutions to national and regional governments.