Britannia Radio

The French temporary EU president features a lot here.

Firstly he is behind the plan to lavish state subsdidies on favoured 
companies to alleviate the recession [it will probably make it much 
worse! ] . This is against Single Market rules andf as the Economist 
points out "it undermines the core EU principle banning subsidies 
that distort competition within Europe. This underpins one of the 
greatest achievements of the European project-the single internal 
market that links 27 variously rich, poor, small and large countries, 
by creating a level playing field for trade between half a billion 
people."  This for Britain is the only real claimed benefit of being 
in the EU at all!

Then the Swedish paper claims that Sarkozy is breaking all the rules 
to ensure that the EU is run by France Germany and the UK! To this 
end he is behind moves to extend his presidency in part at least 
while trying to rearrange the rotational order of other countries.

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ECONOMIST   30.10.08
Europe's baleful bail-outs

State aid to failing industries will benefit politicians' favourites, 
not European citizens

THE cigar-chewing plutocrat-that old standby of political cartoons-is 
enjoying quite a comeback. In Le Monde, a French daily, such tycoons 
have become a front-page staple, portrayed naked apart from the odd 
bow-tie. One Belgian newspaper, La Libre Belgique, showed a boss with 
cigar and top hat plunging to his doom after being stripped of his 
golden parachute by the Belgian prime minister (drawn as a flying 
Superman).

You get the idea. The "dictatorship of the markets" is dead, to quote 
Nicolas Sarkozy, the French president, replaced by "political" 
leadership and an acceptance of the need for "massive" state 
intervention; after aid for the banks it is time to help companies 
and protect jobs. On October 23rd, he unveiled a "strategic national 
investment fund" that will buy stakes in French industries with 
borrowed money to protect them against foreign predators. When 
markets rise, he said, the state will sell its stake and make a profit
-as happened after the 2004 bail-out of the Alstom engineering group. 
Still, Mr Sarkozy's confidence is impressive. Is he certain his ploy 
will make money? And if he is, can we all have his stockbroker's number?

In Italy, meanwhile, Silvio Berlusconi has been rejoicing over the 
new vogue for government subsidies. Only a short time ago, he 
recalled, state aid was viewed as "on a par with mortal sin"; now it 
was "a categorical imperative". Even Britain wants to pour public 
money into bits of the economy that "make a difference". The rush to 
meddle is not uniformly welcomed. Germany's economics minister, 
Michael Glos, said Mr Sarkozy's call for governments to take stakes 
in key industries went against "all successful principles of our 
economic policy". And indeed, there are good economic reasons to be 
wary of intervention; history has not been kind to companies run by 
state planners.

In truth, few governments have money for meddling. Most intervention 
promised for the real economy so far has been virtual, repackaging 
existing spending. But where it takes place, such populism will be a 
problem if it undermines the core EU principle banning subsidies that 
distort competition within Europe. This underpins one of the greatest 
achievements of the European project-the single internal market that 
links 27 variously rich, poor, small and large countries, by creating 
a level playing field for trade between half a billion people. Weaken 
rules against state aid and you risk a damaging "subsidy race" 
between neighbours, says the EU competition commissioner, Neelie Kroes.

Even before the crisis, several governments chafed against EU 
competition rules. In 2007 Mr Sarkozy had a reference to "free and 
undistorted competition" deleted from the EU's proposed new rule 
book, the Lisbon treaty, to appease French voters who think the EU is 
too market-orientated. In French political rhetoric, competition is a 
harsh doctrine whose opposite is solidarité.

Critics are not likely to be won over, in the depths of a crash, with 
economic arguments about the efficiency of markets. So here is a 
political argument: the opposite of competition is not solidarity, 
but monopolies and the maintenance of privilege. Politicians present 
themselves as disinterested guardians of the public good, tempering 
the power of the greedy, reckless capitalist elite. But in truth, too 
much state spending involves taking money from the many, who pay 
taxes and consume goods, and handing it to the few: ex-state 
monopolies, special interests, regional favourites or incumbents. As 
a rule of thumb-call it the Richard Scarry rule-politicians will 
rarely challenge interests that feature in children's books: such as 
farmers, fishermen, firemen and those that build exciting things. Mr 
Sarkozy told the European Parliament recently that EU leaders had a 
duty to ensure Europe could "continue to build aeroplanes, boats, 
trains and cars".

EU regulations are pretty good at rooting out the worst forms of pork-
barrel spending (better, in many cases, than the equivalent rules in 
America). Competition officials in Brussels have long been pursuing 
two loss-making airlines, Alitalia and Olympic, over illegal 
subsidies. Both are tragedies born of patronage on an epic scale. For 
years, decisions about hubs and route maps have been dictated by 
politicians and trade unions trying to preserve local fiefs. Their 
payrolls have been bloated by the appointment of mistresses of the 
powerful, their in-laws and idiot nephews.

Privatisation and restructuring now await these flag-carriers. A 
similar fate is being pushed by Brussels on a set of Polish 
shipyards, which lose money on every ship they build (quite an 
achievement, during the recent shipping boom). Polish taxpayers could 
have several new schools and hospitals for the funds given to the 
shipyards over the years. But these are the birthplace of the anti-
Communist Solidarity trade union, and Polish politicians are scared 
to challenge it.

Please restrain me
Mario Monti, a former EU competition commissioner, recalls how 
finance ministers would often visit Brussels, begging him to rule 
against subsidies they had promised to some local company, perhaps in 
the heat of an electoral campaign. They were "delighted" whenever he 
promised to block the state aid-with the understanding that, of 
course, they would condemn the commission's move in public. "I am 
sure they do the same today," says Mr Monti. If this crisis deepens, 
he says, EU competition policy, especially when it comes to policing 
mergers, can only become more important. Yet he thinks Mr Sarkozy 
also has a point: politicians must be seen to protect ordinary 
citizens to prevent a backlash against globalisation and the markets.

Squaring that circle will be hard. An increase in political meddling 
in the economy is inevitable. But politicians should not pretend they 
will be acting in the interests of all whenever they open the money 
tap. The cigar-chomping tycoons of political cartoons have real-life 
equivalents: oligarchs, monopolists and the operators of cartels. And 
their closest friends are often politicians.
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AFTONBLADET  31.10.08
[I have a copy of this but I can only guess at the exact translation 
from the Swedish.  The headline ""EU, det är jag!" accompanies a most 
unflattering picture of Sarkozy!   It's intro reads "SÄTTER SIG ÖVER 
EU-REGLER Nicolas Sarkozy verkar ovillig att släppa ordförandeskapet 
i EU och diskuterar helst med de andra stormakterna i EU, Tyskland 
och Storbritannien."

Help was at hand, however, for Open Europe has a short precis!
"Swedish daily Aftonbladet criticised the leadership style of current 
EU Council President Nicolas Sarkozy following his reported claims 
that the Czech Republic and Sweden, are "lightweights". The paper 
argues: "Sarkozy is completely ignoring EU regulations and practice: 
the countries billed for presidency are being pushed to one side and 
the authority of the ECB undermined. The three dominant EU powers are 
setting the agenda."
[listed as France, Germany and Great Britain]

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EURACTIV   31.10.08
Czechs, Swedes reject EU presidency swap plan[fr][de]

Both Sweden and the Czech Republic have dismissed suggestions that 
their countries could exchange EU presidencies next year. The idea 
was first put forward by a German MEP to minimise the risk of a 
weakened Czech government leading the Union when Prague takes over 
the bloc's helm in January.

BACKGROUND:
The Czech government emerged weakened from recent local elections, 
losing a number of seats in the Senate (EurActiv 23/10/08). In recent 
days, it also narrowly survived a no-confidence vote in Parliament, 
with 96 MPs voting against the government and 97 in favour.

Analysts believe the government of incumbent Czech Prime Minister 
Mirek Topolanek is in jeopardy, predicting that he may be forced to 
step down during his country's EU presidency. It has even been 
suggested that a caretaker government may have to steer the EU in the 
first half of 2009.
Parliamentary elections in the Czech Republic are expected to take 
place alongside European elections in June 2009.

Ingo Friedrich, a conservative MEP from Germany, called on the Czech 
Republic to swap EU presidencies with Sweden, which is due to take 
over the EU's leadership from Prague in the second half of 2009. "I 
honestly have doubts that the Czechs will be able to solve their 
problems in the coming weeks," Friedrich told EurActiv.

The Czech government was weakened by recent local elections, during 
which it lost a number of seats in the Senate and narrowly avoided a 
no-confidence vote in Parliament. A growing chorus of voices is now 
calling for Prime Minister Mirek Topolanek to step down.

"My intention is not to corner the Czechs," Friedrich continued, "but 
we have to ensure the EU's capacity to act in times of crisis. In 
normal times, this would not be such a big problem, but we are facing 
a global recession. The Czechs should take my suggestion as the 
advice of a concerned friend".

A Czech diplomat told EurActiv that the idea, first circulated in the 
Czech press, was "absurd", adding that it was "legally impossible".

Swedish Prime Minister Carl Bildt's spokesperson told EurActiv that 
aside from the legal aspect, her country was "not prepared" to start 
its presidency in January.

Meanwhile, the suggestion was harming the Czech Republic's image, 
diplomatic sources said, blaming the German MEP for choosing Prague 
as an "easy target" for getting attention ahead of the European 
elections.
A think-tank representative, who preferred not to be named, told 
EurActiv that "MEPs should know that they have nothing to say about 
EU presidencies".

Jifí Cunek, first deputy prime minister and minister for regional 
development, dismissed suggestions that the presidency's preparations 
were late. "I am confident we can make it. I know we are prepared 
very well," he said in an interview with EurActiv.cz.

However, he also admitted that preparations needed to accelerate. 
"After the discussions I had today [with Regional Policy Commissioner 
Danuta Hübner], I realised we must speed up," said Cunek, adding that 
there would be "a lot to debate," especially on the issue of regional 
policy, which he said would be "central" to the Czech agenda.

Asked what would happen if the Czech government was forced to step 
down, Cunek said: "I admit I cannot imagine such a situation. And I 
even do not want to imagine being deputy minister or minister in 
resignation and at the same time holding an EU presidency."

The Czech deputy prime minister blamed the opposition Social 
Democrats for what he called a "total lack of responsibility" in the 
context of the forthcoming Czech EU presidency. The Social Democrats 
leader Jiri Paroubek recently called the government to resign, 
following the local elections, and said he wanted a "government of 
experts" to run the country throughout its EU presidency, with early 
elections at its term.