Friday, July 30, 2004

Time to listen?

Statements deploring excessive EU regulation from British industries, and even now the CBI, are almost a ritual part of the political scene – as indeed are the ritual, but empty, promises by politicians to do something about it. We learn to listen and shrug our shoulders. Nothing will ever happen.

But when the Director, Brussels Office, Verband der Chemischen Industrie (German Chemical Industry Association), Dr Reinhard Quick, starts moaning, perhaps it is time to listen. In a letter to the Financial Times, he takes issue with the recent analysis of economist André Sapir, who had argued in the pages of the FT that "Higher growth should be Barroso's priority". "Unfortunately", writes Quick:

…he forgets to mention that the next Commission should simplify and streamline - say deregulate - existing European laws rather than making new legislative proposals. If President José Manuel Barroso will be judged on the success of the Lisbon agenda, the new Commission must learn to say no to the regulatory activities of some commissioners.

In 2001 the Commission decided to reduce the 97,000 pages of European Union law by 25 per cent, yet it failed bitterly and became a champion in over-regulation. It was typical of the Prodi Commission to make bold statements on industrial policy, competitiveness and better regulation. Yet these statements contrast with 403 finalised legislative acts and 86 finished conciliation procedures, most of which were proposed by the same Commission. These acts increase costs and delay the entry of new products into the European market.

Even if one were to believe - which I do not - that these acts were necessary in order to achieve societal goals, the Commission needs to understand that European companies do not live on an island isolated from international competition. Markets decide, not the Commission. The Commission can set the right framework for companies to compete and to prosper; it can also, unfortunately, contribute to de-industrialisation.

We are faced with the situation that companies turn their backs on Europe and innovate elsewhere, although Europe could be a world leader in new technologies, such as gene technology, biotechnology and nanotechnology.
To conclude, Dr Quick offers a suggestion that we would all heartily endorse:

Rather than debating whether we need to introduce a "greening" of the Lisbon agenda, I would suggest to President Barroso that he economise on environmental and consumer protection. During the Prodi years the business side of the sustainability concept has been bitterly neglected.
Whether Barroso will - or can - take any notice is another matter. The standard advice from this Blog applies: don’t hold you breath.

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