A4-0324/96

Resolution on the XXVth report by the Commission on competition policy - 1995 (COM(96)0126 - C4-0240/96)

The European Parliament,

- having regard to the XXVth report by the Commission on competition policy - 1995 (COM(96)0126 - C4-0240/96),

- having regard to the discussion paper submitted by Commissioner Van Miert on policy on state aid, the Commission working document on competition policy and the competitiveness of European industry and the Fourth Survey on state aid in the European Union in the manufacturing and certain other sectors,

- having regard to the report of the Committee on Economic and Monetary Affairs and Industrial Policy and the opinion of the Committee on Legal Affairs and Citizens' Rights (A4-0324/96),

A. whereas competition policy is an important component of industrial policy and whereas both policies are necessary and complementary if the goals of growth, competitiveness and employment and economic and social cohesion are to be attained,

B. whereas the free play of market forces alone cannot, in an imperfect market, achieve certain priority objectives of the European Union, namely economic and social cohesion, an adequate level of research and development, environmental protection, the growth of SMEs and structural adjustment,

C. whereas the proper development of competition and the quest for equal opportunities for all businesses constitute essential preconditions for the smooth functioning of the internal market,

D. whereas theoretical analysis offers only partial guidance to competition policy,

E. whereas the globalisation of trade presents important opportunities and challenges for the Union, and the formation of strategic alliances which undertakings need to form if they are to compete effectively must not unduly impede access to the market for newcomers to these markets,

F. whereas the allocation of state aid in breach of the EC Treaty is counter productive, favours the inefficient over the efficient, distorts competition between regions and companies and imposes an excessive burden on public budgets,

Restrictive agreements and abuse of a dominant position

1. Declares its confidence in the Commission for its effective, impartial action as the authority responsible for monitoring competition, congratulates it in particular for imposing sanctions on secret price-fixing cartels in 1995 and urges it to continue on this path given the persistence of national or regional practices restricting parallel trade and the distribution of products of other Member States;

2. Is concerned, in the light of the current process of privatization, at the increased control of certain financial and industrial entities which may affect free competition and consumers, and at the strategic alliances in the energy and telecommunications sectors, and calls on the Commission to adjust its statistics to include the European and world concentration ratio of certain multinational industrial and financial businesses and sectors;

3. Calls on the Commission, in view of the complexity of the activities carried out by certain financial and industrial groups in the economy, to define the connections between these groups and their financial links, whilst examining agreements and concentrations, so as to reduce the anti-competitive effect of such operations;

4. Calls on the Commission, when studying and authorizing Community-scale concentrations, to assess their effects on employment and local industrial structure in those Member States which so request, in accordance with the guidelines laid down in the White Paper on competitiveness and employment;

5. Urges the Commission to watch closely to ensure that non-European undertakings do not abuse their dominant positions on the internal market for certain components, for example by means of price discrimination, to the detriment of European manufacturers of products for which the components are essential;

6. Calls on the Commission to ensure that the formation of strategic alliances between undertakings, which are useful for the development of industry, does not prevent other companies from penetrating the relevant market;

Transparency and the competition authority

7. Notes the considerable and steady increase in state aid cases as well as the growing complexity of the Commission's task within the competition policy area; calls for the allocation of greater resources to the responsible DG and for attention to be given to the improvement of the structure of the organization and to access to information technologies;

8. Regards openness, transparency and the democratic control of competition policy as being of vital importance for the public acceptance of competition policy; welcomes in this connection the new information procedure established between the responsible Commissioner and Parliament's Committee on Economic and Monetary Affairs and Industrial Policy;

9. Reaffirms the importance of the Commission's role as guardian of the Treaties and representative of the Union's general interest in ensuring the unbiased application of Articles 85 to 94 of the EC Treaty;

10. Rejects therefore categorically the proposal made by the government of the Federal Republic of Germany to create an ad hoc body consisting of experts appointed by the Member States and exempt from any responsibility or democratic control as a considerable threat to the real coherence and independence of Community competition policy vis-à-vis national pressures;

11. Calls upon the Commission to accelerate the simplification of EU law and related procedures in the area of competition policy, thereby guaranteeing the existence of a favourable environment for enterprises and facilitating true competition;

State monopolies and monopoly rights (Articles 37 and 90)

12. Believes that, if a policy of liberalisation is to succeed, the standard of service must be enhanced, which means that there must be a stringent prior definition of universal service requirements in terms of quality of service, accessibility and cost to the user;

13. Notes that the liberalization of a sector neither necessarily entails nor prevents the privatization of the undertakings responsible for providing services of general interest; takes the view, however, that where the state retains part-ownership of an undertaking, the regulatory authority must be kept strictly separate from the authority responsible for the exercise of ownership rights, so as to forestall any undesirable consequences for competition;

14. Believes that accessibility, universality and quality of service must be important components of market liberalisation;

15. Reiterates, therefore, its position that Article 90(2) of the EC Treaty should be amended in order to preserve services of general interest subject to the rules on competition and emphasizes that the concepts of general interest or service of general interest in all key sectors should be included in general articles of the Treaty covering common policies and citizenship;

16. Recommends the incorporation into Article 3 of the Treaty of a clause on the universal availability of basic services, regardless of whether the provider or producer of such services belongs to the public or private sector;

State aid

17. Calls on the Commission to use all the powers conferred upon it by the Treaty to oblige the Member States to meet their obligations to give notice, in sufficient time, of any plans to grant aid, and to prohibit the granting of any aid which has not been shown in advance to be compatible with the common market;

18. Believes that the rules for the granting of state aid as well as the Commission's internal procedures for vetting state aid cases should be simplified so as to be more efficient and transparent, and proposes the opening of a public register of all state aid granted by the authorities in all Member States, but considers that that should under no circumstances lead to a renationalization of competition policy;

19. Calls upon the Commission to apply rigorously the relevant rules concerning the allocation of state aid and recognizes that state aid must be allocated strictly in accordance with the provisions of Article 92 of the EC Treaty if distortions in competition between the Member States are to be avoided, especially in the air transport sector;

20. Calls on the Commission, in the plans it draws up, not only to introduce simplified procedures but also to concentrate on monitoring notified aid plans and, in general, to devise measures to facilitate access and information for SMEs, in particular those in the least-developed regions;

21. Notes that Articles 92 and 93 of the Treaty apply to aid granted in the form of state guarantees provided to undertakings by certain financial institutions and not notified to the Commission;

22. Stresses, in the context of the problems of innovation, the environment and employment, the significance of clearly defined special provisions;

23. Calls on the Commission to review, update and produce a compilation of the legislation applicable to state aid and to contribute to greater transparency and comprehension by ensuring that the possibilities and limits of a regional and/or national employment-oriented policy of economic and technological promotion are clearly defined;

24. Calls on the Commission to investigate whether, using objective criteria such as the share of the subsidised SMEs, the level of the exempt support can be made variable in the de minimis rule, so that future support measures, such as the French support measure C3/96 to SFMI-Chronopost ((OJ C 206, 17.7.1996, p. 3.)) will no longer cause an artificial improvement of the competitive power of the subsidised sector in relation to their counterparts in other EU countries;

25. Stresses that greater transparency can be achieved by the Commission, continuing its work on producing policy Guidelines, by formalising and publishing procedures for assessing aid and by greater involvement of third parties - both aid recipients and their competitors - in the process; points out that enforcement can be improved by greater use of existing Commission powers against Member States, both with respect to obligations to notify aid and suspension and repayment of illegal aid;

26. Calls on the Commission to consider the need for new instruments - like a Procedural Regulation - in relation to the assessment of state aid, akin to that governing procedure under the Merger Regulation, in order to create formal procedures for applications and approval of aid and complaints procedures for third parties;

27. Calls on the Commission to study the problems which third parties face in bringing actions before national courts in state aid cases, and suggests that a survey of experience across the EU might usefully be undertaken; urges the Commission to consider a 'Remedies Directive¨ as the next step in encouraging compliance with the state aid rules by Member States and in simplifying the procedures for bringing action in national courts;

28. Regrets the fact that Community monitoring of State aid is not as strict as the monitoring of aid from the Structural Funds and that no steps are taken to follow up the objectives for which aid has been authorized, especially in connection with maintaining and/or creating jobs. Calls on the Commission therefore to adapt its policy of monitoring State aid in line with existing procedures for the monitoring of the regional funds and, hence, to ensure that DG IV is operationally coordinated with DG XVI to guarantee the coherence of Community policies;

29. Notes with concern the growing disparities between the central and peripheral regions as regards the increase in state aid to undertakings, a trend which is not in accordance with the goal of cohesion;

30. Stresses, in the light of the significant discrepancies both in volume and in trends in different countries, the goal of convergence between the aid levels of the various Member States;

31. Supports the goal of reducing aid levels for eligible expenditure and requests information on real aid levels (aid to eligible investment), the comparative situation between the various Member States and the use of Community funds;

32. Believes it essential to assess the combined impact of horizontal and regional aid on competition in different sectors and to require notification of all major cases of granting of aid as well as clear horizontal criteria from the Commission;

33. Is concerned at the problems encountered by the "cohesion countries¨, excluding Ireland, in making use of their authorized regional ceilings, by contrast with the more prosperous countries, a trend which will worsen as a result of their convergence programmes to achieve EMU;

34. Calls, therefore, for the introduction of corrective mechanisms in the horizontal framework for intensive capital aid and for convergence targets to be established, as well as a timetable for reducing aid levels to the Community average in terms of added value per employed person;

35. Believes it would not be appropriate to increase disproportionately the size of SMEs for the purposes of inclusion in the policy of state aid and for SMEs in non-assisted areas to receive the same benefits as those in assisted areas;

36. Stresses that - while competition policy must be implemented on the basis of clear and transparent rules - it must also be grounded in observation of the way in which real-world competitive battles are fought; this implies careful consideration of the weight to be given to potentially conflicting objectives, such as:

- adequate company size and the preservation of domestic competition;

- the relationship between competition and collaboration;

- foreign direct investment and control of key technologies;

emphasises that a satisfactory reconciliation of these objectives can only be achieved through a detailed analysis of the situation in each individual sector and a closer integration of competition policy with industrial policy;

37. Stresses that the development of a healthy SME sector requires a particularly nuanced and sophisticated approach to competition policy; while public authorities must ensure that SMEs have access to markets, this is insufficient; an SME development policy is required; such a policy may at times be at odds with the principles of competition policy; firms which occupy a dominant position can also play a role in fostering SME development; SMEs are often started by former employees of these companies; moreover, SMEs often rely on a close relationship with at least one big firm; evidence from successful regional economies also indicates that SMEs thrive within a network of collaborative relationships between firms and that, in some cases, a degree of local preference may be an element in their success;

38. Calls on the Commission, pursuant to Article 130b of the Treaty, to submit proposals on competition policy and economic and social cohesion;

39. Calls on the Commission to publish a communication updating its report on security of energy supply in the European Union and subsidies in the energy sector and to put forward in 1997 coherent, non-discriminatory Community rules on state aid for the entire energy sector, taking into account security of supply and social and regional aspects; calls on the Commission to continue to apply strictly after 2002 the Community rules for aid to the steel industry pursuant to Decision No 3855/91/ECSC and to avoid further derogations from Article 95 of the EC Treaty;

40. Calls on the Commission to draw up a report on the impact on the competitiveness of European steel undertakings of the monitoring of company agreements and mergers under the general framework of the EC Treaty and to examine in particular whether the emergence of new competitors and the development of all undertakings operating in this sector is guaranteed;

41. Believes that, in the specific case of maritime industries, the approach of the main third countries to state aid for this sector requires the Community not to alter its present level of aid so long as the OECD agreement on aid for shipbuilding has not been ratified by all the contracting parties;

42. Is particularly alarmed at the level of aid granted to the highly sensitive banking and financial sector; calls on the Commission to apply rigorously to this sector the rules concerning the granting of state aid;

Coordination with other Community policies

43. Stresses that the optimality of competition policy has to be discussed within the context of its compatibility with the objectives of related policy instruments, i.e. industrial policy, internal market policy and trade policy;

44. Recognizes the Commission as being at the centre of the Community's competition, industrial, trade and internal market policies, and as such likely to solve the problem of coordination among these policies and between the different layers of decision, as well as the problem of insufficient transparency of the links between these four policies;

45. Calls, in this respect, for greater cooperation among those Commission services responsible, best to be guaranteed through the creation of a separate service within the Commission to be given the responsibility of evaluating the costs and benefits associated with the conception and implementation of the four policies, including the employment aspect, and drawing up recommendations for the Commission to be forwarded in the form of an annual report on the coordination of these policies to the European Parliament and the Council;

46. Believes, in this respect, that as a guiding principle these policies aimed at securing a competitive and integrated market should be tempered by the Community objective of maintaing social cohesion;

International conditions

47. Calls on the Commission to assess the influence on competition and the competitiveness of European industry of the agreements, alliances, mergers and other forms of cooperation which are occurring in the European Union and at world level;

48. Urges the Commission to take international provisions into account in applying Community rules on state aid, so that Community industries are not unduly penalized, and strongly advocates that the Commission should be obliged to supply the business world, especially SMUs, with information on trading practices which distort competition and possible anti-dumping measures;

49. Calls on the Commission to endeavour to ensure that minimum social and environmental standards are incorporated in international agreements;

50. Supports the steps towards cooperation between DG IV and the competition authorities of third countries and other international organizations; at the same time calls for bilateral cooperation between the EU and the countries of Latin America, the Mediterranean, Asia and China and considers that it must step up its efforts to devise machinery for international cooperation between the authorities responsible for competition which will ensure that competition rules are implemented at international level and prevent excessive discrepancies between Community rules and those of third countries;

51. Strongly urges the Commission to take steps to produce an international framework for competition, with anti-trust elements and judicial procedures in the context of the World Trade Organization;

52. Calls on the Commission to draw up a report on the changes to be made to competition policy with a view to enlargement incorporating the countries of Central and Eastern Europe;

53. Instructs its President to forward this resolution to the Commission and to the Council.