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Vice President of the European Commission responsible for Competition Policy
Speech at the CINDER (Internacional Center for Registration Law) Congress
CINDER Congress, Amsterdam
17 September 2012
Ladies and Gentlemen,
I would like to thank the organisers of this Conference, and in particular Nicolás Nogueroles and Beatriz Corredor, for their kind invitation to open your congress. It is a pleasure to address this international audience of practitioners, experts and scholars.
It would not be fitting for me to focus my speech today on topics directly related to the skills and duties of your special field of expertise. Don’t worry, though, I will not yield to this temptation.
But one thing I know about the registration-law community is that it operates in extremely important domains for Europe’s economy – and I want to focus on some of these domains from the viewpoint of EU policy-making.
During the last few years – since the bankruptcy of Lehman Brothers in September 2008 – you have been first-hand witnesses of the current difficulties in the banking and real-property sectors in many of our Member States.
And as a consequence, you must have a unique insight into the difficulties that many ordinary people are experiencing these days.
I am thinking of the predicament of those who are trying to buy property and find it difficult to secure adequate financing for their plans at a time where credit has become so difficult to obtain.
I am also thinking of those homeowners and mortgage holders who are concerned by a drop in the value of property, which in some countries is rather pronounced.
And of course, I cannot forget the distress we feel when a family is at risk of facing a foreclosure.
In short, you know first-hand the economic, social and – I would say – personal implications of this prolonged state of uncertainty and of economic contraction.
In this difficult context, part of the public opinion is tempted by the signals sent by the populist camp.
Nationalism is presented as the best solution to the challenges we are facing, whereas the EU is accused of being remote and bureaucratic.
Some critics from the north of Europe point their fingers at the lazy south; others from the south respond by accusing the north for its lack of solidarity. A majority of the citizens want more Europe, but they want a different one.
I don’t share any of these views.
I think that arguments like these constitute a serious risk for most of what we have achieved over half a century of European integration without contributing to bring forward the solutions we need.
In contrast, the EU institutions have reacted to the crisis taking a number of important decisions that will help us to overcome the present difficulties; even though the response has not been as prompt as we would have wished.
I would like to talk about some of the measures adopted to tackle the present situation, put Europe back on the road to recovery and lie the foundations for sustainable growth in the long term.
Major steps to reform the governance of the European and Monetary Union have been taken in the last three years.
After developing a European system for the supervision of financial markets immediately after the onset of the crisis, the Commission has just proposed to entrust to the European Central Bank broad supervisory powers over all the banks in the euro area.
The finance ministers of the EU started to discuss it the last week-end in their informal ECOFIN meeting in Nicosia.
In parallel, the new governance system for fiscal and economic policies will ensure stronger coordination within the EU and most notably within the euro area.
This should help to prevent and correct the structural imbalances that have developed in the EMU. And to ensure long-term sustainability of our monetary union, more will have to be done; including decisive steps towards a fiscal union.
The heads of State and Government have committed to adopt a road-map by the end of the year to complete a banking union and a fully-fledged fiscal union, and to put forward ideas to create a genuine economic union.
Presidents Van Rompuy, Barroso, Juncker and Draghi are working on this proposal, which will include further steps towards a political union.
I very much hope that the ambition showed by Europe’s leaders in support of a stronger and better EU will be translated into concrete agreements and common priorities.
In this regard, the speech delivered by President Barroso before the European Parliament last week contains many good ideas for the work that all European institutions should carry out in the near future.
Now, let me give you my views on what I regard as the best platform for the achievement of our economic objectives. I am referring to the pivotal role of Europe’s Single Market as a platform for growth.
In today’s global economy, growth can happen at a significant pace only if European markets are integrated.
Firms should be able to operate at a sufficiently large scale to reach their customers and to benefit from the efficiencies made possible by technological advances.
A stronger and broader Single Market is a precondition to growth in Europe. Firms can exploit better the economies of scale if they have access to a large, integrated market.
Fair and open competition in the Single Market prepares European firms to compete in the global markets.
Creating a unified economic area without internal borders has always been a major objective of the European project.
For a Europe that had just emerged from a disastrous war and from centuries of tension and instability, the best way to preserve peace and prosperity on the continent was genuine economic integration – and this continues to be the case. In this respect, the European project has been a resounding success so far.
But if the goals of economic integration received quite a substantial support over time by large sectors of the public opinion, their implementation on the ground has not always been easy.
As we can see even these days in the context of the euro crisis, the temptation to defend
national interests at the expense of the interest of all is difficult to resist.
I believe this is the main reason why building the Single Market despite its imperative necessity is proving an arduous task.
I will now turn to my area of responsibility. We must make sure that everyone operating in Europe’s Single Market plays by common rules.
The guarantee of a level playing field is one of the essential conditions to reap the benefits of the elimination of the internal barriers across Europe.
And competition control is one of the most important factors to achieve the ultimate goal of establishing a genuine Single Market.
Competition policy has been a major force for economic integration in Europe and for growth and competitiveness at every step of the process.
And I will make sure that it remains so and that it continues to support the regulatory process of market integration.
It is my duty as Commissioner in charge of competition policy to guarantee that companies and organisations do not privately rebuild the barriers that European governments have committed to tear down.
My responsibility also extends to some decisions taken by EU governments. The Treaty gives to the Commission exclusive competence over the control of State Aid.
We have to make sure that State subsidies and other public policies do not give an unfair advantage to companies and do not distort competition in the internal market.
Competition policy supports efficiency and the creation of economic value. It forces players to win on merit and not on privileges.
To use a sports image, a competition authority is like the referee in a football match. His task is to make sure that everyone respects the rules of the game and that no player or team enjoys an unfair advantage. And when this happens, it is his duty to sanction them.
A good referee guarantees that the best team wins and that each player on the pitch brings out his best skills and produces his best effort. And this is what we do at the competition department of the European Commission.
In fact, to be more precise, the competition game is a positive-sum game; it is possible – and quite frequent – that many champions share the benefits of larger markets and higher demand.
Implementing EU competition law has a direct impact on the lives of everyone residing in Europe.
A robust competition policy is essential to create a fair and open business environment where companies can contend with each other on equal terms. This brings lower prices and a wider choice of products and services to us all.
In addition to the benefits for consumers, a healthy competitive marketplace is also good for economic activity and competitiveness, because it promotes efficiency and innovation across the economy. And we all know how much Europe needs to boost its economic performance these days.
As my predecessors in this position have done before me, I am trying to use all the instruments at my disposal to create the best environment for growth in Europe and help to complete the Single Market.
Based on my experience, today I am even more convinced than the day I took over that competition on the merits is a necessary condition for a sustainable pattern of growth, and to tap the full benefits of a Single Market of 500 million consumers.
However, there are claims that competition enforcement should be softened because of the crisis.
Some argue that the harsh conditions of the markets, and in particular the dynamism shown by the biggest emerging economies, need to be accommodated with a more lenient approach from my side.
I strongly disagree.
We must urgently create the conditions that allow our companies and every economic player to consider the whole of the EU as their own playground and to be free to do business in every corner of the Union without barriers and undue restrictions.
The industrial policy that Europe needs must be consistent – and not in contradiction – with the principles of our Single Market and with our common competition-policy rules.
A modern industrial policy in Europe cannot be based on the same wrong assumptions of the "picking winners" strategy that failed in the second half of last century.
A company that is unable to compete freely in the Single Market will not succeed in the world markets.
Only in a pan-European marketplace can allow our companies to reach the size they need to take on their global competitors.
And a keen and well-regulated competition environment on European scale can make them strong, efficient, and innovative enough.
Ladies and Gentlemen:
Before I conclude, let me have a quick look from the standpoint of competition policy at the liberal professions such as engineers, accountants, lawyers, and your own.
I don’t need to make the case here that these professional services are very important for the economy and business, and that their quality and competitiveness have substantial spill-over effects in every EU country.
Professional services exist because they tackle certain market failures, mainly associated to asymmetric information. Therefore, if the scope of their activities is adequately regulated, their work contributes positively to economic efficiency.
However, when this regulation fails, such professional services may hamper growth and innovation, especially when the goal of the regulation is not to reduce asymmetries in information and enhance economic certainty, but the protection of the professional's economic interests.
The liberal professions are still highly regulated by both governments and professional bodies; although the extent of these regulations varies in the different parts of Europe.
Regulation is often presented as a guarantee of the quality of the services and of compliance with ethical rules.
Professional orders can often be useful to protect consumer interests and to safeguard the independence and integrity of a profession.
However, regulations and professional orders can raise concerns for competition when they are not proportionate or are used to limit access to a profession and curb the freedom of professionals.
So, there are still gaps in the internal market and in the competitive conditions for the main liberal professions; the key restrictions to competition being fixed or recommended prices, advertising regulations, entry requirements, and reserved rights.
Usually, these issues are handled by the competition authorities in each country of the EU, given the national scope of regulations and practices. We have intervened in this domain at EU level in very few cases.
At any rate, the Commission and national authorities are fully coordinated within the European Competition Network, taking into account that the legal basis for our enforcement are the same articles of the Treaty, and we regularly discuss with the 27 national authorities about their decisions and investigations.
In addition, the European Commission and the European Council have tackled the bottlenecks caused by the liberal professions which introduce inefficiencies in the way markets function in many countries.
Ladies and Gentlemen:
In closing, let me repeat that the Single Market is a political, legal and institutional pillar of the EU, but its implications for the economy and for the wellbeing of Europeans are just as important.
Competition control is a very powerful and efficient means to leverage the potential of the Single Market for growth, because – unlike other policies – its effects are immediate and it will cost nothing to the taxpayer.
Competition policy can also bring lasting effects. The power of deterrence of our sanctions does change firms’ behaviour and improves the business environment for all.
In addition, the control of State aid, aimed to preserve a level playing field in the internal market, has taken on a special significance.
In these times of adjustments and austerity, it is also a very useful tool reconcile a policy of fiscal consolidation with a sound strategy for growth.
Finally, the action of competition authorities brings fairness to the markets and to society at large, because it protects consumers and firms regardless of the size and market power of the infringers.
This is important for smaller companies, which don’t have the clout – and the legal departments – to defend themselves against anti-competitive practices. So in this respect, competition control is also a democratic policy.
The internal market is not only Europe’s political masterpiece but our most valuable economic asset. In a multi-polar world, it can give us as a decisive edge over our international partners.
No country in the EU – no matter how large and wealthy – can hope to stand the competition of traditional and emerging economic giants in today’s globalised economy.
Each one of us stands a chance to defend our interests and promote our values only if we think of Europe – the whole of Europe – as our home.