http://www.businessweek.com/stories/2006-08-03/berlin-and-eu-spar-over-transport-rules

Global Economics

Berlin and EU Spar Over Transport Rules


A looming conflict between Berlin and the European Commission over anti-terror rules for goods transport is the latest in a series of internal market-related disputes, raising questions about the German government's EU enthusiasm.

German daily Handelsblatt reported on Thursday (3 August) that Berlin is resisting plans by EU transport commissioner Jacques Barrot designed to better protect transport of goods against terrorist attacks.

The proposals, including quality certificates for "reliable" transport firms, are seen in Berlin as bureaucratic, with state secretary for the economy Joachim Wuermeling telling the paper that "the commission has clearly gone too far with this legislative proposal."

The case is the latest in a raft of recent disputes over EU regulation between Berlin and Brussels, which is increasingly seen by German politicians as meddling too much in national politics.

One row which has seen the headlines in the country's newspapers is about German public banks, which play a big role in the financial sector.

STRONG WORDS. Internal market commissioner Charlie McCreevy is strongly against a German rule allowing the title "Sparkasse" (savings bank) only to be carried by public banks, effectively ruling out takeovers of the "Sparkasse" banks by foreign private parties.

Berlin has in the meantime signalled it will probably accede to Brussels' pressure, but German officials were still using strong words in June saying that Berlin was ready to go through "the whole escalation process," including a clash with the commission at the European Court of Justice.

Another hot dispute involves telecom commissioner Viviane Reding, who has attacked German plans to grant a temporary monopoly to Germany's former state-owned giant Telekom for creating a high-speed internet VDSL network.

"I hope we can get back to a constructive dialogue," Germany's economy minister Michael Glos declared according to Die Welt, with Brussels planning legal action against Berlin for hampering competition.

Meanwhile, Berlin is gathering other EU capitals' support against plans by the commission to more closely scrutinise state loans and guarantees to small companies, called "catastrophic" by Mr Glos.

German officials are also annoyed by commission plans to extend public EU procurement rules to small construction and other projects.

MERKEL AND SCHRODER. The German government's mounting irritation with Brussels' internal market activism contrasts with the strong pro-EU image of the country's chancellor, Angela Merkel.

When the conservative Ms Merkel took office last autumn, she vowed to improve relations with the EU executive which had become markedly troubled under her social democrat predecessor Gerhard Schroder.

Mr Schroder had opposed key EU economic laws such as the services directive, while regularly lashing out at Brussels "bureaucrats".

Ms Merkel has instead shied away from any public clashes with the commission, while creating an image of herself as a constructive peacemaker at EU summit meetings.

But at the same time her ministers, such as Mr Glos, appear to have followed Mr Schroder's more confrontational line in their day-to-day dealings with Brussels officials.

On top of this, much of the substance of Mr Schroder's criticism on EU "bureaucracy" is supported by Ms Merkel even if she does not share his style.

The chancellor has announced on a number of occasions that cutting EU red tape will be one of her top priorities when Germany takes on the bloc's presidency in January 2007.


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