UK lambasts Europe over protectionism

London, April 8:

The British chancellor (finance minister) Gordon Brown will today urge his fellow European finance mi-nisters to make a new push to open up EU markets to competition and resist a growing tide of protectionism within the EU.

The chancellor, who said last week that badly functioning gas markets in the EU meant British consumers were now paying 10 billion pounds a year more for their gas than they should, is pushing for tougher action from Brussels against what is being called ‘economic patriotism’ in countries such as France, Spain and Italy.

He is presenting an Ecofin meeting of EU finance ministers and central bank chiefs in Vienna with a new pamphlet called the Case for Open Markets: how increased competition can equip Europe for global change. “The EU needs to do more to complete the single market, drive up levels of competition and open up to the rest of the world,” Brown’s pamphlet says.

He will call for the establishment of panels of experts in particular fields to report back regularly to EU competition commissioner Neelie Kroes about uncompetitive behaviour or market abuse by firms in sectors such as energy and telecoms so that the commission

can launch legal actions against companies. The British government is furious that a lack of adequate gas supplies in winter through an undersea pipeline from Belgium to Britain pushed spot gas prices up to record levels. Brown believes that the new competition regime put in place by the Labour government in Britain has worked well, improving the efficiency of markets and lowering prices to consumers. Britain’s openness to overseas investment, he thinks, has increased wealth and boosted employment in Britain. He thinks much of Europe, fearing the impact of globalisation, is becoming more inward-looking. Examples include the French government late last year publishing a list of industries it would not be prepared to see taken over by foreign firms and, in February, engineering a merger between French company Suez and Gaz de France when Suez became the target for a takeover by an Italian firm.

“We need to put in place the conditions that will enable European companies and brands to thrive in a global market and make Europe an attractive location for global companies to invest,” the report states. The commission launched actions against 17 of the EU’s 25 members earlier this week for violations of the single market, particularly in the electricity and gas industries, which are due to be fully liberalised in July next year. Mr Brown wants the commission’s powers in this and other areas beefed up and broadened.

The chancellor has long been exasperated at much of the EU’s inability to push through sweeping economic reforms to labour, product and capital markets agreed at Lisbon in 2000 which were designed to increase economic growth and reduce the bloc’s 20 million unemployed.

He thinks that only by embracing the opportunities of globalisation, rather than perceiving it as a threat, can Europe deliver more jobs and prosperity. And this does not mean that Europe has to abandon its social democratic traditions.