Thursday, April 21, 2005

Neelie is disappointed

Poor “Nickel” Neelie. You have to feel sorry for her. There she was, happily ensconced on endless corporate boards, minding her own business (and the advantages that business gave her). Then suddenly, wham! She becomes the Commissar for Competition and great things are expected from her.

Single-handedly (well, nobody REALLY believes all that stuff about free-marketeer Barroso or free-trader Mandelson any more) she is expected to transform the social-democratic agenda of the single market and the continuing habit of picking national winners, prevalent in most member states, but particularly France and Germany.

So the lady is not completely happy with the results on the annual scoreboard of state aid, published yesterday by the Commission.

“I am disappointed that the overall level of aid relative to GDP has not fallen in line with the commitments undertaken by the member states themselves at the Stockholm European Council in 2001.”
Never mind, she said, brightening a bit, there has been “a welcome shift in aid towards general objectives, such as research and development”. Hmm.

The figures for 2003 are predictable or disappointing, depending on your point of view.

The 15 member countries gave out €53 billion (£36.2 billion) in grant and subsidies in that year, almost half the budget being accounted for by France and Germany. Not that it helped their economies much but then state aid rarely does.

As Carl Mortished says in today’s Times:
“Germany is consistently the biggest provider of state aid, handing over €16 billion in 2003. In second and third place were France and Italy, which spent €9 billion and €7 billion, respectively. Britain gave €4 billion but in relation to economic weight, Finland led the field with subsidies equal to 1.4 per cent of GDP.”
“Most of the state aid granted in 2003, some €32 billion, went to the manufacturing and services sector and €14 billion was given to agriculture and fisheries. Germany’s inefficient coal mines absorbed €3 billion.”
The Commission gave a dusty response to Gordon Brown’s suggestion that the competition directorate should become a stand-alone body, independent of the Commission. One must admit, they have a point. What precisely would the benefit of that be?

But it is hard to see why Commissar Kroes should be disappointed. Did she think that just because politicians gave undertakings in Stockholm or whereer, they would keep to these when national votes are at stake?

How does she think the sort of social-democratic economic system she, presumably, favours can be run without endless redistribution of funds. Just wait till the East Europeans get seriously in on the act. Then Neelie will really have something to complain about.

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