Sarkozy v Brown
In the history of attempted coups at European summits, the by M Sarkozy of the EU’s commitment to “undistorted competition” from the new draft treaty takes some beating.
So much for Sarkozy “the reformer”.
What he has done will split the EU right down the middle.
It’s also an explicit attack by the French president on Gordon Brown’s vision for Europe – which doesn’t augur for European harmony in the months ahead.
Apart from anything else, the promotion of competition has brought unmitigated benefits to European consumers, in the form of lower prices for all manner of goods and services.
There would probably be no Ryanair or Easyjet, if it weren’t for EU competition policy.
There would have been less pressure on mobile phone companies to lower their prices for using phones abroad.
And the European Commission’s periodic forays into duffing up huge companies that exploit their enormous market power – such as – would probably not have happened.
The pro-competition philosophy, enshrined in all previous treaties, is an example – perhaps a rare one – of the EU being directly in touch with the needs of citizens. So at a time when the EU has something of a credibility problem, it’s slightly odd to weaken that pro-competition approach.
However for the French government – and to an extent the German one too – the triumph of the British liberal-market approach to the stewardship of economies rankles. Many European governments long for the days when they could subsidise business in the putatively strategic interests of their respective economies and not be worried about being prosecuted for distorting competition. And it irks them that most of their biggest companies can no longer be protected from Europe-wide competition.
As for Gordon Brown, what Sarkozy has done attacks the essence of how he thinks Europe should be. He believes that globalisation is the unstoppable economic force of our age – and he believes that European member states will be unfit to prosper in a globalising world unless their economies become leaner and meaner subject to the discipline of competition.
He will not be able to accept a treaty that excludes the historic competition clause.
But Tony Blair and the UK cannot afford to fight for its reinstatement as a lone voice – partly because Blair has too much else on his shopping list, and also because it would be devastating for the cohesion of the EU if this were Britain against the rest on an issue of such moment.
Happily, British officials appear to have wound up the Irish to lead the fight back. The Portuguese and Italians are also likely to join the cause.
Perhaps most significantly of all, the European Commission is up in arms about what M Sarkozy has done: its very legitimacy will be in question, if it can no longer fight the good fight for European consumers.
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This begs the question: "what is the EU for?"
If the EU does not stand for a single free market then I don't see that it has a legitimate purpose any more.
Of course Blair can "fight" for the competition aspects to be kept. Blair has a very simple tool for ensuring that the UK gets the treaty it needs. Blair should not sign up to any treaty which is not in the UK's interest. Simple.
The competition rules were the main reason the UK entered the EEC in the first place and if they are taken out then we may as well take ourselves out. The political and regulatory cost of being "in" would have no counteracting benefit with those rules removed.
All that will happen is that French and Germany subsidies will destroy what little industry we have left.
So much for Sarkozy the 'Conservative'. There is nothing remotely Right-wing about his Protectionist stance. It seems the European Union is becoming 'inward looking'. Britain will have to reconsider its membership of the EU if it is to degenerate into a Protectionist club opposed to Globalisation and Free Trade. As the slogan says 'Britain Out of Europe and into the World'.
Thank you again to Robert Peston for cutting through the EU jargon and bringing the meaning of the proposed treaty changes clear and sharp for us all to understand.
My take is that if what he says is correct, then this change to the EU treaty would certainly nullify the basis on which the UK referendum was held in 1971, and would in itself be justification for the UK to have another referendum. What do you think?
What is the EU for ? A good question Mr Perkins which should be answered and agreed before the new treaty is accepted. Social democrats (not the same as Libdems)across Europe would argue it's purpose is NOT a free market area, that was EFTA which failed, but that it should aim to protect jobs, peace, quality of life and security of all it's citizens. What degree of free market this requires is only a secondary issue.
I agree with David Russell, post 4.
This change does negate the grounds for entry to the EU, so no referendum would be required to take us out. Once out, which should be done in an orderly fashion, with our government paying EU grants already agreed out of money not paid to the EU, we can think about having a referendum on going in.
Sarkozy gave a remarkable interview with Charlie Rose at the end of January during the presidential campaign in which he pretty much told all about himself. And what an obvious liar he is. Oh America we love you, we want to be like you, we want to copy those things you do which create jobs, produce wealth, bring benefits to your whole population. But...you should sign Kyoto. Too bad Rose never pointed out that the reason the US didn't sign Kyoto, why Europe didn't live up to its commitments under Kyoto, and why China won't agree to any Kyoto like CO2 cuts is that it has exactly the opposite effect on the economy he says he'd like to effect.
It's a case of heads they win, tails you lose. In a competitive world, unless you are "lean and mean" or have some other edge, you will not win. What Europe failed to recognize but Margaret Thatcher saw and corrected was that the conditions which allowed a prosperous welfare state in Western Europe to emerge would not last forever. The corrective actions she took prepared Britain for the times we live in now while Europe lulled itself into a delusion which it still cherishes but cannot hold on to that it prospered through its own efforts and ingenuity. One way or another, the standard of living in Western Europe must become much lower in the not too long future. What were those conditions which prevailed but no longer exist. Just after World War II, the US realized that it would be necessary to quickly rebuild shattered Europe and Japan, see to it that they had flourishing economies, and protect them physically so that they would not fall into the Soviet Empire through political suicide. To do this, after the Marshall plan and concurrent with NATO, the US gave large American corporations tremendous incentives to invest in Europe and allowed Europe free access to the US domestic market, the largest and richest in the world while allowing Europeans to practice monopolistic domestic policies and enforce protectionist tarriffs against foreign imports including American products. With the emergence of China as a very hungry, impovrished nation, isolated and having the most dangerous nuclear weapons, and with the cold war with the USSR over, the economic hothouse which nourished Europe and Japan was taken down and moved to China.
So if Europe remains true to open Competition, Britain will continue to prosper while continental Western Europe's domestic economies will continue to die, the high cost of the social safety net and the vast maze of laws and bureaucratic processes so inimical to Europe pricing its goods and services out of the market everywhere, even at home against foreign competition. On the other hand, if it installs protectionist and anticompetitive policies as Sarkozy proposes, the reaction from its competitors will be to retaliate with new restrictions on European exports of their own, designed to inflict the most pain possible. So, its heads Europe loses, tails Europe loses. The only question is whether the UK will choose to go down with the EU ship.
The ex CEO of Morgan Crucible, Ian Norris, presently awaiting ' extradition' from the UK
to the US for alledged price fixing might be interested to know that in Europe at least price rigging is not a crime. Provided, that is, the rigging involves government and state owned or strategic businesses and is for the greater good. Well thats all right then. Isn't it?
A free trade area which isn't based on free trade.
Hmmm, only the French could come up with that one...
To be honest I reckon he's playing to the crowd. Knows fine well that the removal of the free trade stuff will cause outrage among the brits and other member states. He'll be able to give in gracefully in a week or two a fallen hero of the French left, with an upswelling of support to allow domestic reform.
Look Preston
You either publish my article, or I take you to the Broadcasting Complaints Commission and get you fired.
This is a democracy and I am entitled to my opinion especially of an agency financed by the Public.
3 Hours without posting my article which may I add is legit and factually right is simply ridiculous.
You know I'm right and hence this is your motivation in suppressing it.
How is Joe Public suppose to make it's mind up about the EU constitution if journalists simply behave like a cartel and act anti Europe.
Mark says that the UK will continue to prosper...
An interesting statement given that our balance of trade deficit is the size of the GDP of a small country, our house prices have gone through the roof, household debt is at an alltime record high, we've flogged off most our industry to other EU countries or the Americans and that we believe Private Equity is a "force for good".
I'd also point out that in a recent report the UK was twentieth in the competitiveness league table, has now been overtaken by New Zealand and is sliding backwards.
Furthermore the Director General of the CBI said recently "In today's rapidly changing economic world order, we must create more global enterprises if we want the UK to remain in the top tier of world economies. Yet in the past 20 years the number we have built from scratch has been low."
The UK prospering - my aunt fanny.. !
Why so much passion and leaping to far reaching conclusions about Mr Sarkosy's hidden (or not)intentions?
Free competition is and will be part of treaties notwithstanding that particular line which upset French voters and could have blocked the European process - as it did at the time of the referendum.
By the way it is not so much European competion but competition from other countries where labor standards are low that concerns the French.
Scamp #11
If Britain is not flourishing, why did Sarkozy go to London to vist the community of 400,000 French ex-pats, among the best and brightest France has to offer to try to convince them to come back to France and give it another chance? As everyone knows, no Frenchman would leave his Gaelic paradise unless there was no other choice and these French saw that they had no chance for a career in their own country where a life as a mid level management bureaucrat flunky is the lifelong ambition of the average university graduate.
Britain's trade defecit is an indication that it needs more goods and services from abroad to fuel its economy than it can produce or export. This is a sign of a healthy economy if it is kept within managable levels so that inflation remains reasonable. So are increasing housing prices which indicates that more people want to live in the UK than there are homes available because they see opportunities they don't find elsewhere. Why did 650,000 Poles emigrate to the UK, not for the climate. The high household debt indicates that consumers feel confident that they will continue to earn more money and so don't mind taking risks by borrowing on credit to buy what they want now.
While the UK may not be the most competitive nation in the world, it is well ahead of most of its EU counterparts reflecting a better balance between the cost of its social safety net and its ability to generate wealth. Compare this to France which spends half of its two trillion dollar income on health care. Who in his right mind would invest in a new business in France or Germany where you can never fire an employee once you hire him and they get about 5 or more weeks a year paid vacation?
It might interest you to know that the US once had a strong balance of trade surplus and government tax surplusses and thought its economy was well managed. That was in the 1920s just before the greatest economic depression in history.
I think this is a lot of fuss over nothing. Preambles to treaties are not legally binding and at best only hold vague interpretational value.
Sarkozy was not suggesting amending Article 87 (ex Article 92), which is the primary state aid treaty provision. In fact, Blair's initial defence of his position was that the substantive law was not changing at all.
And I have never seen the ECJ reference that some words were missing from the final draft of a preamble as teleological proof of the intention of the legislators.
So why all the fuss? Because certain parts of the media wish to make this into an issue...
I wish you'd read what M. Sarkozy actually said. He's all for EU free trade, but reciprocal with the rest of the world. That means no social or economic dumping by the Chinese in the EU. Why is that a problem ?
That means that the US cannot devalue their $ whenever they wish and expect the EU to sit back and do nothing to match Boeing in the global aircraft market. This is a strategic area for the EU.
Or maybe the rest of the EU should take the UK attitude and shut down/sell off their strategic manufacturing?
Why have a go at Sarkozy, Mr. Preston? I'm not a big fan of the new president, but he has won 4 elections in the last 3 months in France (2 rounds of Presidential and legislative elections) and has large popular backing.
Compare to G. Brown. Unelected except within his own party. His mandate is pretty poor to be lecturing other EU nations on how the EU should progress. N'est-ce pas ?
The nuances of the agreement show that free trade is not something being extracted here.
I think you will find this is typical political barter over terminology. The actual impact on the existing agreements will be minimal.
Mr S is simply trying to protect French interests from the influx of cheap hyper-competitive labour from the East. If we Brits had more gumption perhaps we would make an agreement with a strong European leader to do just that anyway...
Congratualtions Tony.
Could you be even more intellectually dishonest in your sore comments?
1. You hammer a list of good things that "might probably" not have happened in the past had the competition policy of the EU not been in place. This is tantamount to rewriting history, ergo it's a logical fallacy.
2. The fact that the EU competition policy is not stipulated in this new treaty does not erase it from previous treaties. Anything that the commission did in the past, it will be able to do in the future and do it even better.
3. If Brown or Blair did not want this new treaty, well, they should have rejected it, period. If you don't like the treaty, don't whine about Sarkozy alone, for he was not alone agreeing to it.
Despite years of being in a supposed "free trade area", we still don't see much sign that our European counterparts are willing to liberalise their markets to the same extent as the UK. As evidence of this, there are numerous British utilities that have been snapped up by the Germans and French. I think the French think it unimaginable that a British company could come in and buy up their utilities one by one. How does this constitute "liberalisation" - or is it just a lot of hot air? N'est-ce pas?