Free Market Commitments of the European Union on a Pragmatic Practice Basis - Research Paper Example

 The EEC, which started on 1 January 1958, was based on what is a common market. Within the European Union, this had eight main implications. Member states have to remove the customs duty (or tariff) protection which they applied to goods sold to each other. They also had to remove any charges equivalent in effect to customs duties. For example, the Italian government imposed a statistical levy on imports and exports. This government policy had to be discontinued, as in the perspective of the Commission and Court of Justice it was equivalent in effect to a customs duty. Second, member states also had to dismantle quantitative restrictions (or quotas) on goods sold to each other. They had to discontinue the imposition of measures which resembled quantitative restrictions. One case was that of West Germany which had a law which banned the sale of liqueurs of low alcohol content. French Cassis de Dijon, manufactured from blackcurrants, failed to meet the standard and imports into Germany were banned. The effect of this rule was equivalent to the imposition of a zero import quota. These measures, designed to create internal free trade in goods, were complemented by a requirement to progressively abolish restrictions on the freedom to supply services across frontiers such as banking, insurance and The European governments had to remove all forms of tariffs and measures equivalent to quotas. Restrictions on the freedom to supply services are lifted. However, the Non-Tariff Barriers (NTBs)still since the Rome Treaty provided the Community institutions with powers to control the NTBs. The SEM had a common currency. The euro, which was introduced in 2002, is the single European currency which had replaced the national currencies of the 27 member countries of the European Union (euroland) that began on 1 January 1999. The exchange rates of the euroland countries were fixed to the euro. While marking a milestone in the European Union's economic integration process, the launch of the euro has significance beyond Europe. Some economists and financial experts believe the euro could become a major international currency that can pose a threat to the US dollar. EUCP = EU Competition Policy The European Competition Policy applies rules to make sure that companies compete with each other and, in order to sell their products, innovate and offer good prices to European consumers. The economic core of the EEC called for the free movement of goods, capital, services, and people among its original members. For instance, Article 81 of the Maastricht Treaty, which helped establish the EU, refers explicitly to the prohibition of practices which "limit or control production, markets, technical development, or investment." To implement EU’s competition policy, there are designated competition commissioners. All 27 national competition authorities in the EU are able to apply EU rules at their local level in consultation with the Competition Commission. Europe has vibrant competitive markets which have winners, picked by consumers, from level playing field. These corporate winners create new dynamics such as venture capital networks. These companies are EADS, Total-Final-Elf, BNP Paribas, Suez, Vivendi Universal, DaimlerChrysler, Vodafone or Sanofi-Aventis. SPEU = Single Policy EU n 1986, twelve member states of the European Communities of the Single European Act (SEA) ratified the Act broadly and gained two things. First, the Act modified the founding treaties which gave rise to the three European treatises such as the Paris treaty of 1951 which created the European Coal and Steel Community (ECSC), the Rome Treaty of 1957 which brought into being the European Atomic Energy Community (EURATOM) and the other Rome Treaty of 1957, which called into existence the European Economic Community (EEC). The SEA made possible these things. It granted new decision-making powers to the Council of Ministers and European Parliament, designed to facilitate the implementation of the aims of all the founding treaties, but particularly those of the EEC treaty. It sought to speed up the process of completing the Single European Market (SEM) as originally foreseen in the EEC treaty. Furthermore, it placed selected areas of economic and social policy more firmly within the ambit of Community competence and reinforced others, encompassing not only on monetary cooperation but also on social, regional, science, techno logy and environmental policies. The European Union also established a governing central bank that will coordinate economic, fiscal and financial policies covering the member states. The Article 108 of the 1992 Maastricht Treaty, established the European Central Bank (ECB). It explicitly states that European officials should "respect this principle and not seek to influence the members of the decision-making bodies of the ECB." There is a governing body in the European Union that processes anti-trust competition cases raised by a member state against another member state. These infringements of competition rules harms the consumers. These breaches have become an every day occurrence. That is well known to BEUC members, but to MEPs I say that this is bread and butter issue affecting your constituents. In this age of the global economy, the fight to promote consumer rights is one of the great battles of our age. Defending consumers' interests is at the heart of the European Commission's competition policy. In concrete terms: competition gives citizens better goods and services, and ensures businesses have more opportunities to sell them. The European Court of Justice stated it clearly: victims of competition law infringements have a right to damages and they must have a realistic chance to enforce this right. Not only individual consumers are hurt but it is also the law-abiding companies who face competitive disadvantages compared to their lawbreaking competitors who suffer, and it is ultimately the society at large who pays the bill as infringers cream off the extra profits. For competition cases, the Commission suggests, in the White Paper, a combination of two complementary mechanisms: (1) representative actions, which are brought by qualified entities certified for this purpose by the Member State concerned, and (2) opt-in collective actions, in which victims expressly decide to combine their individual claims for harm they suffered into one single action. Part II France in the European Union France is a leader in Western Europe because of its size, location, and large economy, membership in European organizations, strong military posture, and energetic diplomacy. France generally has worked to strengthen the global economic and political influence of the EU and its role in common European defense. It views Franco-German cooperation and the development of a European Security and Defense Policy (ESDP) with other EU members, as the foundation of efforts to enhance European security. When former French President Jacques Chirac decided to advance France's referendum on the draft European Union constitution to May 29, 2005, the idea was to avoid the “Maastricht scenario”. In May 2005, public support for the treaty sank. Almost 55% of people voted "No", with 45% in favour. Turnout was high, at about 70%. Chirac had lobbied for a “Yes” vote. Then on February 4, 2008, France formally ratified the Lisbon Treaty, with its publication in the country's official journal. It was the fifth country to approve the reform treaty and the first of the EU's founder members to do so. The French parliament voted to adopt the document last week, almost three years after a French No dealt a fatal blow to the European Constitution. The members of the European Commission led by Chief Commissioner Jose Manuel Barroso gave a sigh of relief after France ratified the new EU Treaty. Most EU governments wish to avoid further public referendums and ratified the EU union by parliamentary vote. France avoided the risk of another embarrassment to Brussels by dropping a referendum and instead ratifying the treaty through parliament vote. The Treaty of Lisbon will allow for better responses to European citizens’ concerns, it will reinforce democracy and efficient decision-making for its 27 members, and it will permit European countries to turn completely toward the development of future politics in matters of energy, environment, immigration, prosperity, and security for our fellow countrymen. This treaty offers a political boost for the European Union. France takes the lead role in implementing this treaty in Western Europe. PART 3 What is Free Market and Social Democracy position? Free Market position of Sarkozy vis-à-vis the Social Democrat position Sarkozy through the Union of Popular Movement Party has a firm vision of a highly centralized, authoritarian state. His ideas becomes the action plans tof the Union of Popular Movement Party. He had greater appeal to French voters who were tired of unkept promises and influenced by incessant talk of ‘national decline’. Artis, et, al., (2000) stated that in France, on the Left of the Socialist Party, this term is assimilated with the Right. He explained that during the thirty-year boom period after World War II, the social democrats were not particularly on the Right. Their over-all political agenda consisted of a policies geared towards equal redistribution of the wealth. Nicolas Sarkozy’s victory marks a serious shift to free market and neoliberal policies. Sarkozy will implement the ambitious program of counter-reforms that big business in France has envied its British counterparts. Sarkozy got a solid support from older voters. Sarkozy also appealed to many conservative-minded and manual workers which also extended to many ex-Communist voters. His party will take care of establishing special centers for immigrant groups. He recognizes the positive role of religion in holding society together and he pushed for ‘positive discrimination’. Sarkozy’s victory was built on a carefully constructed panorama of social groups with diverse interests. In Socialist or Communist strongholds, his speeches were filled with references to French working-class heroes. He got the working class, the middle-class voters, the self-employed and private-sector employees on the grounds that he would be hard on ‘spongers’, public-sector strikers, social security claimants and lazy civil servants. A central piece of Sarkozy’s campaign was an attack on France’s 35-hour week, which was a problem for business and a violation of the ‘right’ of workers to boost their income through overtime. Sarkozy would introduce a law banning the gross executive compensation packages given to bankrupt firms. He put emphasis on rewarding individual effort and allowing ‘honest’ workers to keep the fruits of their labour by cutting income tax. He wants a property-owning democracy, where French families can own their homes. His ideal was ‘the school of Jules Ferry’, the founder of the French public education system and a leading advocate of colonization. He placed importance on France’s ‘civilizing mission’ as the incarnation of the republican triptych of Liberty, Equality and Fraternity where he showed France’s leading role in bringing peace and harmony to the Mediterranean, the Middle East and Africa. Sarkozy’s election also marks a break with France’s so-called ‘Arab policy’ in the Middle East. He garnered an overwhelming support from France’s large Jewish community. Several left-wing personalities were also offered jobs, including Bernard Kouchner who became foreign minister. Various ex-left-wing figures had declared their support for Sarkozy, including André Glucksmann and representatives of the ‘national-republican’ wing of French socialism. Sarkozy was determined to rescue French industry from the threats of relocation. On taxation, Sarkozy wanted to produce more wealth. He wants to impose a tax ceiling for high-income earners. He explained that the high levels of taxation removed initiative and fostered the flight of entrepreneurs to other European countries. President Nicolas Sarkozy appointed 11 women, three from minority backgrounds to his cabinet, the most favorable move in favor of the feminists such as Justice Minister Rachida Dati, and Rama Yade, new junior minister for human rights. Sarkozy was given a clear mandate for his reform package, including loosening labor laws, cutting taxes, and scrapping the 35-hour working week, which he hopes will boost the economy and reduce France's 8.3 percent unemployment. Sarkozy prepares to integrate France entirely into the structures of an Atlantic alliance. All agreements with Britain were signed, and the common vision for a ‘Global Europe’ refer to deepening a privileged relationship with the USA. The British prime minister moreover stressed the central importance of NATO for all defence strategies : Sarkozy’s announcement to send a thousand French soldiers to Afghanistan is a direct response to a request from Washington and London. Brown might well say “both of us enjoy a strong relationship with our American partners”. Nicolas Sarkozy gave praise to old England. He described a Great Britain with a strong economy due to “values work”, a model that should be imported to France. Avis, L’Humanite, April 4, 2008) Sarkozy has favored previous policies on pensions, social security reform, privatization, university reform and taxation which were designed to make workers and students pay a greater share of the costs, free capital for profitable investment and give French industry a more competitive edge. The party was in favour of the neoliberal European constitutional treaty during the 2005 referendum campaign. THE SOCIAL DEMOCRAT PARTY AND ITS POLICIES ON THE ECONOMY Royal wants economic realism. In terms of political representation, Royal’s policies are limiting elected politicians to a single function, devolving more powers to the regions, increasing the prerogatives of parliament, introducing proportionality to the electoral system and creating popular ‘juries’ to assess politicians’ performan The real weakness of Royal’s campaign, however, was political. Her main originality was the notion of ‘participatory democracy’, which led her to hold a series of meetings in which she mainly ‘listened’ to members of the public. While initially praised as proof of innovativeness and openness, it soon became clear that this would lead to no major policy proposals. In the final confrontation with Sarkozy, her ‘openness’ could easily be interpreted as ‘evasiveness’, as when Sarkozy challenged her on reform of the 35-hour week. Whereas the right-wing candidate seemed to have clear ideas, Royal repeatedly answered that she would let the ‘social partners’ (employers’ and workers’ representatives) negotiate changes to the law, while refusing to say which changes she thought were necessary. On a series of major issues, Royal often seemed content to reiterate general principles and vaunt the superiority of her ‘values’. On the fundamental questions of economic policy and liberalization, Royal’s policies differed little from those of Sarkozy. On racism and immigration, the Social Democrat Party has a more compassionate stance. Royal’s early talk of military-style treatment centres for young offenders and a policy of ‘zero tolerance’ and restoration of traditional values advocated a tougher policy on criminals. Part 4 Where are they moving? Protectionism has hit European Union members, as governments frightened by the rise in cross-border takeovers and mergers and faced by stubbornly high levels of unemployment have sought to protect high profile national companies and to promote national champions. France heads it. Spain, Germany and Poland followed France lead. This national interference in the Single Market has rattled the European Commission. French nationalism is shown in these examples. The alleged plans by the US food company PepsiCo to takeover Danone (a French firm) in 2005 led to a political controversy in France with both the President and the Prime Minister denouncing the idea. The French response was motivated by fears of job losses and national pride. There was no PepsiCo takeover. Former President Chirac opposed “as a matter of principle” the proposed merger of the New York Stock Exchange with the Euronext stock exchange in June 2006. France passed a law designed to protect 11 “security-related” sectors of the economy from takeovers. It implemented the EU takeover directive in French law in a allows a form of defence to takeover bids designed to frustrate them. The current policy of President Nicolas Sarkozy in France is a mixture of free market policies with strong government control. French companies are buying companies in the European Union. However, the French government protects French businesses by take-over of European Union member companies. The government is on a huge spending spree to promote and push for a stronger growth in 2008. This stimulus package will not enable France to balance its budget. Part 5 Example France wants to ward off the take-over of Gaz France, one of France’s top companies by Italy’s Inel SpA power, a power conglomerate. France’s national gas utility, Gaz de France, then teamed up with the Franco-Belgian utility Suez, to create an energy behemoth with some 72 billion euros in revenue. In addition, the French government blocked German firm, Siemens from increasing its ownership stake in Framatome, the sector of Areva charged with the construction of nuclear reactors. Instead, it allowed another French firm, energy group Alstom and its national firm Bouygues, an infrastructure company, to step into Siemens’ shoes. Sarkozy also implemented an 11 million euro stimulus package for France causing problems in its budget. He also lobbied during a European Union meeting in Brussels for the removal of the words “free and undistorted competition” in the body’s main objectives. Intertwined with the devotion to free market reforms is the upsurge of economic nationalism by France. French holds sacred the notion that the nationality of ownership matters. Thus the merger of two French or German firms is acceptable but the takeover of a French or Italian firm by an Italian or German firm is not. While this particular notion may not contradict EU law or obligations per se, it definitely contradicts the spirit. The EU embodies the notion that countries are better off when they share sovereignty and that nationality should not matter in the single market. The French government applies free market commitments of the European Union on a pragmatic practice basis. However, when French interests are important in a business take-over, the French government takes on a nationalistic stance. Works Cited Artis, Michael, Axel Weber and Elizabeth Hennessy. (2000). A Challenge and Opportunity for Financial Markets. London: Routledge. Bulpett,C. 2002, Regimes of Exclusion, European Urban and Regional Studies, Vol.9 No.2, pp.137-149 Deibert, Michel. “France hedges Free Market with Government Control.” IPS News. September 15, 2007. Dyson, Kenneth. (2000). The Politics of the Euro-Zone: Stability or Breakdown?. Oxford: Oxford University Press. Place of Publication: Oxford. “The Euro” . Africa Recovery, Vol.12#4 (April 1999), page 25. Marlière, Philippe “It would be suicidal for the Left to import Blairism in Franc.”Translated vendredi 13 juillet 2007, par Jonathan Pierrel. Potts, N. 2003. To whose value is the EURO? European Business Review, Vol. 15 No.4, pp.221-234 Potts, N. 2001, Kalecki any old idiot and the European Central Bank, European Business Review, Vol. 13 No.3, pp.166-184 Potts, N. 2001, Rapid Reform in Retrospect , Economic and Business Review: For Central and South-Eastern Europe, Vol.2 No.2, pp.209-228 Swann, Dennis. (1992). The Single European Market and beyond: A Study of the Wider Implications of the Single European Act. New York: Routledge. Page: 3 Read More