Liberalisation holds key to new era for transport

Date: 30/01/1997

By Michael Mann

WITHOUT an efficient transport infrastructure, the EU will never achieve its hallowed goal of a genuine single market.

Those at the centre of the drive to improve the links between Europe's urban centres and the underdeveloped regions on its periphery also insist it stands little chance of inspiring the industrial competitiveness seen as a prerequisite if the Union is to maintain its economic pre-eminence into the 21st century.

In his first two years in Brussels, Transport Commissioner Neil Kinnock has discarded some of his past political baggage and embraced wholeheartedly the notion that liberalisation offers the only chance of survival for a number of transport sectors.

But his task is - and will remain - far from easy.

In a number of areas, the European Commission has little influence over decisions taken on the ground, and can only offer guidance it hopes will be followed by those who control the purse-strings.

Even where it does have a say, its efforts are often hamstrung by the unwillingness of EU governments to part with the money needed to turn good intentions into realities.

To make matters worse, member states have often been prepared to undermine the Commission's efforts to create the much sought after 'level playing-field', paying out large state subsidies with flagrant disregard for the notions of free and open competition.

As Kinnock's White Paper on the future of Europe's railways showed, he also has to contend with lobbies who react defensively to any perceived threat to their future.

But despite the assault course confronting him, Kinnock has attempted to chart a clear path.

He talks of turning a “patchwork into a network”, not least through the Trans-European Networks (TENs) which have become such a flagship for the Commission's efforts to stimulate jobs.

He has also sought to embellish his 'green' credentials by calling for the true environmental costs of transport to be built into pricing systems, and encouraging people out of their cars and on to buses and trains.

This has required considerable diplomacy in a society which remains in love with the car. Launching his Green Paper on “fair and efficient pricing”, Kinnock stressed it was “not anti-car, nor does it bluntly recommend higher road taxes”. Not everyone is convinced.

But if it is unable to persuade everyone to give up ingrained habits, the Commission can at least win friends by concentrating on areas where ordinary EU citizens are affected most directly.

The drive to complete the liberalisation of the Union's skies should reduce the pressure on travellers' wallets. And, following a number of high-profile accidents, the Commission has also recognised the positive publicity to be gained from championing safety issues.

Although the controversial disputes - such as that between the UK and the Commission over the British Airways/American Airlines link-up - grab the headlines, they have been an unwelcome distraction from the struggle to widen competition in Europe's skies.

Last year saw 56 new scheduled airlines take off. The fact that only 17 of them failed showed that the improvement of the past few years is continuing.

But with 'open skies' just two months away, formidable obstacles still stand in the way of cheaper fares and better services on many key intra-EU routes.

The process has not been helped by the Commission's failure to persuade Union governments to liberalise groundhandling until well into the next century and arguments about the allocation of landing slots.

Airlines are the first to accuse the railways of benefiting from heavy government support for their infrastructure. But they are far from innocent themselves: massive subsidies to struggling flag-carriers are among the highest-profile state aid cases handled by the Commission.

The increase from 29 such cases in the transport sector in 1994 to 52 in 1995 is merely a portent of what is to come as privatisation spreads through the industry.

Competition Commissioner Karel van Miert will be a busy man if the Union is serious about ensuring a level playing-field.

He has already begun to take on the container shipping industry. By the time anti-trust battles such as the Trans Atlantic Conference Agreement on cargo sharing have been sorted out, this sector will look very different.

Although the EU controls around a third of the world's maritime fleet, the Commission has steered clear of the industry until relatively recently.

But Van Miert's new interest has been matched by Kinnock, who has sought to tighten safety regulations while trying to devise a long-term strategy to avoid the much-feared decline in Europe's influence on the world market.

Similarly, the Commission is taking the lead in boosting inland shipping, with a competitive revolution anticipated when new legislation comes into force in 2000. But in the coastal shipping sector, it has come under fire from shipowners for failing to reduce the amount of red tape faced by captains as they cross the Union's internal borders.

Safety initiatives in the maritime freight sector have been mirrored elsewhere in the EU's waters.

The speed with which the Union agreed to push through tighter standards of ferry safety was almost unprecedented. But as is so often the case, it took a series of major disasters to get the policy-makers moving.

Similarly, the decision to try to forge the Joint Aviation Authorities into an airline safety organisation was mainly inspired by the loss of more than 170 lives in a crash over the Dominican Republic.

Indeed, safety will be of paramount importance in influencing the transport choices which travellers make as the newly liberalised sectors vie for business over the next decade.

No one will be more aware of this than the operators of the trains running through the Channel Tunnel, following last year's fire which shut down the tunnel and forced thousands of travellers on to ferries.

Yet it is projects such as the 'Chunnel' which inspire those looking to the future for fast and efficient transport links.

The Commission has pinned its hopes on hi-tech research projects such as the 'train of the future', while today's train operators are struggling to compete for crucial freight and passenger business.

Amazingly, six years after transport ministers signed up to an 'open rails' directive, only nine member states have written the legislation into their statute books.

Kinnock warned recently that the rail industry was an “incomparable asset” and any further decline in the sector would have enormous economic, employment, environmental and social consequences for the Union.

But his proposed solutions to the sector's ills have not met with universal approval. In November, 15,000 railway workers took to the streets of Brussels to express their anger.

Perhaps Kinnock's wish to achieve a better balance between the different forms of transport will have more success if he is able to persuade governments of the need to reflect environmental and infrastructure costs in road taxing schemes.

His first attempt - through the Eurovignette road haulage tax - looked doomed to failure until tricky negotiations with the Swiss intervened to give the plans a real hope of survival.

He has also pushed the idea of a 'Citizens' Network' to encourage the use of public transport, but is aware that the Union has little influence over the planning decisions of regional and local authorities.

Enhanced public transport would certainly reduce another serious transport-related problem, that of urban air pollution.

Environment Commissioner Ritt Bjerregaard is pushing measures to reduce noxious emissions from cars and improve fuel quality.

The inevitable conciliation battle between EU governments and MEPs will provide some of the most colourful political fireworks in the skies above Brussels in the months to come.