Germans drop plan for Union anti-trust office

Date: 05/06/1997

By Tim Jones

GERMANY has bowed to the inevitable and quietly shelved attempts to create an independent EU cartel office during the current round of negotiations on revising the Union's founding treaties.

As the Intergovernmental Conference draws to a probable close at the Amsterdam summit on 16-17 June, Bonn officials have acknowledged that they cannot win over enough member states to their radical idea of stripping the European Commission of its merger-vetting powers.

“We know that the proposal is right, but its time has not yet come,” said a senior German official, confirming that the plan had been taken off the table.

“What we find hard to imagine is a Union with 20-plus member states and decisions on mergers still being taken every Wednesday by the Commission.”

The Germans wanted to emulate their Bundeskartellamt at a European level, creating an agency above political influence.

While the 20 Commissioners would continue to take decisions in the areas of vetting state aids and policing state monopolies, life-or-death approvals of company mergers would pass to the new agency.

Bonn alleges that Commissioners are too often open to political persuasion. In support of its case, the Bundeskartellamt often cites the 1995 take-over of ailing bus manufacturer Kässbohrer by Mercedes-Benz, when the office was overruled by both the German ministry of economic affairs and the Commission.

In 1994, Competition Commissioner Karel van Miert favoured blocking a link-up between German engineering company Mannesman and France's Vallourec in the market for steel tubes. But he was outvoted by the full Commission and forced to reverse his ruling.

Under the German plan, this kind of bargaining would end. Inquiries would instead be carried out by small teams of lawyers and economists, and rulings made on anti-trust grounds alone, with no regard to wider questions of industrial policy.

Dieter Wolf, president of the Bundeskartellamt, laments the failure of the German scheme to take off, but is ever hopeful. “The proposal cannot find a majority, but is still there,” he said. “If it does not make it with Maastricht II, it will come through in the end. It has its own momentum now.”

The failure of the plan will be warmly welcomed by Van Miert, whose vigorous opposition was a crucial factor contributing to its demise. Last year, he published a detailed rebuttal and accused a German government which had used its political influence in subsidy battles over shipbuilder Bremer Vulkan and carmaker Volkswagen of hypocrisy.

Nevertheless, both Wolf and the German government have taken comfort from support they have received fom new anti-trust authorities in Italy and the Netherlands, as well as from new UK Prime Minister Tony Blair.

The Italians even suggested inserting an enabling clause into the revised treaty foreseeing the creation of an independent office.

“The Commission is somewhat behind developments,” said Wolf. “All of the younger authorities have shown their support for independence.”

He also pointed out that the sector-specific regulatory authorities being created throughout the EU to police the newly formed telecommunications and energy markets had independent statutes. “There is a growing understanding that these authorities can only be effective if they operate without political influence,” he said.

The German economics ministry is still hoping that the current IGC will at least commit itself to discussing the creation of an anti-trust authority when the next treaty revision talks begin in the new century.