A level playing field?

Polityka Insight has published a research report (April 2017) claiming that the EU is applying its competition directives unfairly in support of older member states, to the detriment of more recent members. Polityka Insight-2

The report opens with a summary of its key points, which need no comment from us, other than that the report confirms the lack of integrity – and resultant fragility – of the EU project:

In applying the Community’s anti-monopoly law, the European Commission has to keep the broader objectives of the EU economic policy in mind, for example the building of a common market. … To maintain cohesion and create a common market, the EU’s competition policy must provide companies from the new EU countries with access to foreign markets. If the Directorate General for Competition [DG Competition] does not change its policy towards these countries, the disparity in wealth of the Member States will grow, which will translate into a decline in the competitiveness of the EU as a whole.
A quantitative and qualitative analysis of the decisions of DG Competition points to the possibility of unequal treatment of the old Member States (which acceded to the Community before 2004) and the new EU, and their firms. The differentiation concerns the application of the EU rules on state aid and anti-monopoly law (prohibiting abuse of a dominant position).
Companies from the countries which joined the EU after 2004 are trying to use the EU anti-monopoly law to stop competitors from “abusing their dominant position” more than do companies from the old EU. DG Competition, however, rejects their complaints. … Taking the size of the economies of the Member States into account, the number of decisions finding an abuse of a dominant position by firms from the new Union, and the fines imposed, appears to be disproportionate to the number of decisions made against companies from the old EU. Since 2004, DG Competition has never sided with a company from a new member state where the case was about abuses by a firm from the old EU.
The countries of the old EU are also given preference when it comes to the EU’s state aid policy, the responsibility of the European Commission’s DG Competition. Subsidies given by the old EU states go unchallenged by the Commission significantly more often than in the case of the new EU countries – both in terms of sums involved and the number of the Commission’s recovery decisions. Where the Commission does challenge aid given by the old EU states, its decisions are enforced less rigorously than against new EU countries and the subsidies challenged by the Commission are less efficiently recovered. In addition, for reasons that are not clear, the Commission applies a unique legal instrument, an injunction – an order suspending aid – only to the new countries of the EU.

The report is 32 pages long and the research appears to be thorough enough to overcome any doubts that it simply represents the views of a more recent member state (Poland). Balance

The second section of the report, which follows a description of their research hypothesis, offers a lengthy survey under the heading, “What is EU competition policy about?” Sub-sections cover the aims of EU economic policy and the aims of EU competition policy. The report emphasises the apparent importance to the EU of such policies, including: combating trade barriers, providing access to markets, economic cohesion, gaining access to foreign markets for entrepreneurs and, most important in this context, industrial policy and prohibition of public aid. It is particularly this last policy that is contradicted by EU practice, according to the authors.

Section 3 details, with the support of charts, how the EU favours companies from the ‘old’ EU. Section 4 analyses data that lead to the conclusion that countries from the ‘old’ Union more easily subsidise their companies.

One interesting chart, among several, shows that France and Germany give more illegal state aid to their companies than all the other countries of the EU combined. In fact the ‘old’ union countries (15) give more than five times as much state aid to their companies than do the ‘new’ countries (12). And far more such state aid is recovered from new members than from old (hardly any is recovered from France and Germany). Polityka Insight-4

The report’s summary concludes that:

Our analyses demonstrate that DG Competition may treat countries of the old and the new Union and their companies unequally. Such differentiation refers to both the application of the rules on state aid and anti-monopoly provisions (prohibition against abuse of a dominant position).”

We can contrast the reality of EU practice with the stories that they tell themselves, and want their citizens to believe. Samples from the recent Rome Declaration include:

Bullshit amplifierWe have built a unique Union with common institutions and strong values, a community of peace, freedom, democracy, human rights and the rule of law, a major economic power with unparalleled levels of social protection and welfare.”

We will make the European Union stronger and more resilient, through even greater unity and solidarity … Unity is both a necessity and our free choice. … Our Union is undivided and indivisible.”

We note the hypocritical and dishonest references to: “the rule of law”, “unparalleled levels of social protection”, “even greater unity”, “undivided and indivisible”. Each of these is contradicted by the many unsavoury practices of the EU, not least by the ones referred to in this report.

Taking a broader view, we can see this report as a sample of the evidence that highlights the two major divisions within the EU. North-South and East-West. The EU has been designed by, and for the benefit of, countries of North-western Europe. The EU requires the participation of many more nations because its leaders wish to declare that it is a project for Europe. The Plan is nothing if not grandiose. And most opposition to the EU comes from the East and the South. The UK is an obvious exception, but then it has never been a whole-hearted member and has had the ability to opt out of some bits it doesn’t like; smaller and weaker member states are not given this option.

It is the disparity between the requirements of its ideology and the requirements of its citizens that will bring the EU down.

Polityka Insight dPolityka Insight-1escribes itself as follows:

Polityka Insight offers on-order analytical services. Our experts will examine the topic
of your interest and answer your questions.
See more at: http://www.politykainsight.pl/en-research



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