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babebibobu
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Joined: Sep 29, 2007
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Nov 20, 2007 - 12:09 PM |
 
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| Post subject: french president sarkozy lectured by his Masters |
Rhetoric belies France’s rethink on virtues of competition
By John Thornhill in Paris
Published: November 18 2007 15:24 | Last updated: November 18 2007 15:24
President Nicolas Sarkozy has given the impression that competition is a dirty word in France. In June, he alarmed supporters of Europe’s single market by insisting that the European Union drop an endorsement of “free and undistorted competition” in the revised text of its constitutional treaty.
Railing against the ideologues in Brussels who blindly followed the free market faith, he asked: “As an ideology, as a dogma, what has competition given Europe?” Mr Sarkozy was at it again last week in a speech to the European parliament. “Europe should not be alone in the world in making competition a religion,” he said.
Economic liberals fear that Mr Sarkozy’s rhetorical assault on competition policy could erode the free-market principles that have underpinned the way of doing things in Europe for more than 50 years and encourage protectionism.
Yet a high-profile commission set up by Mr Sarkozy to “liberate” economic growth in France has been arguing that competition is part of the solution rather than the problem. Jacques Attali, a socialist luminary who chairs this commission, has recommended a liberalisation of the labour market, the injection of more competition into strictly regulated retail and service industries and the creation of an independent competition authority to empower the consumer.
Composed of 43 French and foreign economists, business executives and academics, the Attali commission is due to present its full report at the year-end – but the government has already cautiously welcomed its preliminary conclusions. “The objective of the commission is to make a big wind of competition blow through the French economy to the benefit of consumers. That suits me very well,” Christine Lagarde, finance minister, told Le Figaro newspaper.
One observer rather surprised at the latest turn of events in France is Mario Monti, the former EU competition commissioner and member of the Attali commission. In 2004 Mr Monti clashed with Mr Sarkozy, then finance minister, over French state support for the troubled Alstom engineering group. The academic Italian has since been fiercely critical of French dirigisme and attempts to dilute the EU’s competition mandate.
Mr Monti suggests that a quiet revolution is taking place in French policy thinking, most notably among the members of the Attali commission. “When I was in Brussels, even a reference to consumers was viewed as extravagant or even outrageous in France,” he says.
“It is very atypical in France to put the consumer at the centre of the argument ... Many of these proposed reforms, if implemented, would greatly transform the French economy from an administered economy into a market economy.”
At a seminar in Paris this month on competition policy, hosted by France’s European Movement, Mr Monti gamely tried to sell the virtues of competition to a broader and more sceptical French audience. An active competition policy not only led to a more efficient allocation of resources and more dynamic economic growth, he argued. It also helped to protect the poor, the weak, and small businesses from powerful cartels and big corporate interests abusing their market dominance.
Mr Monti also cited the EU competition authorities’ success in forcing Microsoft to unbundle its software packages, arguing that Europe’s competition policy was becoming the template for the world and an important element of “soft power”. “For Asia, Europe is more of a point of reference on competition policy” than the US, he said.
French participants countered that antipathy towards free-market competition ran deep in the country’s culture. Such suspicions flourished during the referendum campaign in 2005 on Europe’s constitutional treaty, when eurosceptics denounced Brussels as a nest of “Anglo-Saxon liberals”. The determination to temper “free and undistorted competition” became a rallying cry for the treaty’s opponents, helping them win the referendum.
Jean-Louis Bianco, one of the opposition Socialist party’s most reflective thinkers, said that historically this antipathy had spanned most shades of the political spectrum. “It is not a monopoly of the left and the extreme left but also of the right and among the French patronat [business bosses],” he said. “There is a very French tendency to insist on the limits of the market economy and its drawbacks rather than its virtues.”
In France’s charged political environment, in which the trades unions are locked in an arm-wrestling contest with Mr Sarkozy over pension and labour market reforms, it is hard to imagine the French president endorsing – let alone implementing – all the Attali commission’s recommendations.
Yet the politicians at the seminar suggested that the public debate was evolving fast. There could be an increasing acceptance of market competition, they argued, but only if its rules were seen to be fair. “Yes to competition but it must be truly equitable,” as Mr Bianco put it.
But what does that mean in practice? Jean-Pierre Jouyet, Europe minister, insisted that France did not want to weaken EU competition policy and he celebrated the European Commission’s victory in the Microsoft case. However, he argued that Brussels’ thinking must also evolve and place competition policy in a broader context.
Mere mention of industrial policy in the Commission 10-15 years ago was regarded as a “pornographic term”, he said. Now, industrial policy was openly referred to in official EU communiqués. Consideration for public services, small businesses, environmental priorities, energy security and Europe’s grands projets – such as space technology and aerospace – also had to be taken into account, he said.
“What has changed is that other policies have been affirmed at the European level,” he said. “Competition policy must aid, not block, our goals.”
Even so, some observers suggest that the evolution of the French debate reflects a developing trend within the EU to strengthen consumers’ interests. Ann Mettler, executive director of the Lisbon Council, a Brussels-based think-tank, says the EU has been using competition policy to bring about a fundamental economic shift away from incumbent industries towards consumers and small businesses.
“There is a need to create a new vocabulary for reform and competition policy – and that is what the French are trying to do right now,” she says. “When Sarkozy talks about about meritocracy he is saying, ‘let the best win’. That is competition policy.”
Copyright The Financial Times Limited 2007 |
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wolfy
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Joined: Sep 13, 2004
Posts: 2510
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Nov 20, 2007 - 12:45 PM |
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Tough call. I think protectionism is necessary in industries of strategic national importance such as defence, healthcare and energy. Everything else should be thrown to the dogs. |
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babebibobu
LoopKicker
Joined: Sep 29, 2007
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Nov 20, 2007 - 12:56 PM |
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I dont understand how the part about Microsoft. Why Microsoft needs to be so heavily regulated but everything else should just be ruled by the so-called "invisible hand" of the market. As long as the money goes into the "invisible pocket" of our "invisible masters". |
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I'm dancing with tears in my eyes... 'cause the girl in my arms is a boy |
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wolfy
Fire-eater
Joined: Sep 13, 2004
Posts: 2510
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Nov 20, 2007 - 01:05 PM |
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No other firm has such a stranglehold on its market. |
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babebibobu
LoopKicker
Joined: Sep 29, 2007
Posts: 946
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Nov 20, 2007 - 01:10 PM |
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Anyway liberalism is good for Europe and protectionism is good for the US, thats what we mere consumers learn from our benevolent leaders. As long as I can buy what I want, who am I to even discuss this? Capitalism is the End of History anyway, the fall of the Berlin Wall has proven that the Invisible Hand of the Market would save us all, there is no alternative policy anyway, unless you are one of those new Hitlers. |
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I'm dancing with tears in my eyes... 'cause the girl in my arms is a boy |
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wolfy
Fire-eater
Joined: Sep 13, 2004
Posts: 2510
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| Posted:
Nov 20, 2007 - 01:44 PM |
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