Global Economics

An Anticompetitive Europe Must Not Rise


Libertas Institute founder Declan Ganley says politicians who coddle elites and entrenched interests risk stifling Europe's enormous potential

French President Nicolas Sarkozy, who offered the promise of challenging vested interests, has now reverted to the status quo of European elites from whence he came. At the recent European Union summit, he proposed slashing from the new European Constitution (which has been deliberately mislabeled a "reform treaty") its commitment to "free and undistorted competition." This is one of the few components of the Constitution that was clear and unambiguous, and which has been included in every version since the founding Treaty of Rome in 1957.

The removal of the competition clause raises grave questions about the EU's ability to take on monopolies, pursue antitrust measures, and tackle so-called "national champions"—the incumbent cartels much beloved of Sarkozy's predecessor (and manifested in his own case by the bailout of Alstom during his tenure as a deficit-increasing Finance Minister).

Then, just a few days ago, as though to dispel any doubt over his about-face on real reform, Sarkozy stated that the EU "needs debates so that competition stops being a religion." There are many falsehoods professing themselves as accepted wisdom and truth in today's Europe, but the need for competition isn't one of them.

Europe's Real Champions

Let's not kid ourselves: There is nothing creative or entrepreneurial in special interests that seek favor and protection from competition. They are the very definition of "courtiers"—jealously sucking from the teat of the state and long-suffering European taxpayers, drying up the wellspring of European enterprise while hiding behind the bogeyman of "unfair foreign competition" as they inflict drought on European creativity and competitiveness, further empowering our global competitors.

Dropping the commitment from the text is designed to bolster protectionism, monopolies, national champions—that is, vested interests. This is a sure way to crush innovation, entrepreneurship, and competition, benefiting incumbents over entrepreneurial growth companies. It must be remembered that small and midsize companies collectively account for most European job creation, and they are also Europe's only hope of being competitive at the onset of the 21st century. These are Europe's real champions. They seek no protection, only opportunity. They thrive on competition. They are and will be the source of jobs and quality of life for Europe's future generations.

So, what's to be done? In the face of a rising China and India—not to mention our powerful transatlantic brethren—the "European project" is in fact the only hope and opportunity for Europe to maintain its global influence as a force for good and, dare I say it, to have any chance for real global leadership. This is something that is within our grasp as history's tide has taken us to this great point. We should thus be troubled that, so early in this new era, so many seem resigned to decisions that give way to "The Asian Century." If we are bold enough, this still can and will be "The European Century."

The Will of the People

Yes, we spent most of the past hundred years (as well as centuries before that) in internecine blood baths. But this is our opportunity to tell the world, "We're back, we're better, and we're ready to compete to make the world a better place." On this voyage, only the citizens of Europe can forge the way. The Brussels elite must be held accountable at the ballot box. We have come too far for Presidents to be appointed rather than elected. If this elite is to govern, and right now they do, they must subject themselves to the consent of Europe's citizenry. Without that, we are mere subjects.

Vaclav Havel once said, "Europe speaks to my head but says nothing to my heart." Too many leaders across Europe ignore the will of the people, insist on the resurrection of this undead constitution, and revert reflexively to introverted protectionist policies. In doing so, they drain hope, innovation, competitive strength, and faith in Europe, thus risking our collective future. As for the even more appalling version of a constitution now being passed off by Angela Merkel and friends as a reform treaty, I'd humbly suggest leaving it in the tomb to which the enlightened citizens of France and the Netherlands consigned it.

Certainly, Europe needs a constitution. When we finally get one, let's make it clear and concise so that everyone can understand it. The Americans, in spite of all their challenges, have managed to get by fairly well with a document that runs 13 pages, including every amendment to the present day. We could be indulgent with, say, 20 pages.

The Opportunity to Hope

But if the elite insist on proffering 400 pages of nonsense, they shouldn't be surprised when they get sent back to the drawing board. If this is worth doing, it's worth doing right. If it takes us four or 40 years to get there, then so be it, but trying to smuggle a constitution through parliaments and ignoring the people while pandering to vested interests under the guise of a constitutional rewrite will only result in the same answer.

The time has arrived for the people of Europe to determine what the future will hold for this ancient and enlightened civilization that has given the world so much of lasting value—the principles of liberty, democracy, the dignity of the individual, the sanctity of life, and the opportunity to innovate, compete, progress, and to hope. All of this has been paid for with the sweat and blood of generations gone before us.

The era of stagnancy, unaccountability, and protectionist anticompetitive pandering to vested interests must end now. The pent-up tide of European innovation and creativity must be released by accountable and visionary government at EU and national levels. It must be enshrined in our laws so that a strong, competitive, and confident Europe can have the chance to lead the world to a place worth going to.

Declan Ganley is the chairman and chief executive of Rivada Networks, a member of the board of Europe's 500 Entrepreneurs for Growth, and founder of the Libertas Institute, a pan-European think tank. He resides in County Galway, Ireland.

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