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European Commission

Siim Kallas

Vice President of the European Commission

Building a competitive future for Europe’s ports

Permanent Representation of the Netherlands to the EU/Brussels

23 October 2013

Prime Minister, Ambassador, ladies and gentlemen

We can now say justifiably that Europe is - slowly but surely - emerging from the economic downturn.

In my view, the best way to stimulate growth is to remove barriers to market activity and open new possibilities for the market economy to work properly.

The most promising source of economic growth and future prosperity is also Europe’s best asset: its vast single market of 500 million consumers.

But the tremendous potential that it offers is not yet being fully used.

That also applies to transport: the single market’s bedrock and backbone.

To generate trade, and thereby prosperity and employment, we need smooth joined-up networks and proper connections.

And to do that, as we progress in building a single European transport area, the business environment has to be fair, open and competitive.

This is the philosophy underlying my approach to transport policy in general. It is also the thinking behind my proposals for European ports.

With these, we aim to:

- secure long-term success for our ports so they can deliver a better service to Europe’s industry and economy;

- and secure their position as cornerstones of the Trans-European Transport Network.

Rotterdam is a good example, located on three of the nine corridors of the new core network: Rhine-Alpine, North Sea-Baltic and North Sea-Mediterranean.

As the largest EU port in goods handled, Rotterdam is already a showcase for the European port industry.

But it is only if we succeed in completing the TEN-T and single European transport area that it will succeed in its worthy aspiration: to remain a global hub and become a top European industrial cluster by 2030.

As the trade gateways to Europe’s single market, ports cannot be allowed to become bottlenecks because of poor or congested connections to their surrounding areas, or because of under-performing services.

That is why ports must be seen in a pan-European context - not a national one.

Why? Because most of the traffic in TEN-T ports comes from sea or land links with other EU Member States. Two-thirds of the goods handled by Dutch ports come, or go, to another EU country.

Also, if Europe’s logistics network and hub-and-spoke operations are to work properly, then all TEN-T ports have to perform well.

As we know, not all ports offer the same high-level service as Rotterdam - or Antwerp, or Hamburg. Efficiency and performance vary a lot around Europe.

There is a real EU divide.

Even the best-performing ports like Rotterdam need other ports to stay successful. Structural disparities in port performance and competitiveness negatively affect the whole business climate for European ports.

If under-performing ports became more efficient, the entire sector would benefit.

More short sea shipping connections would be created - meaning less congestion in the areas surrounding ports, more port activities and many new jobs.

This would allow all ports to be fully and more equally integrated into the TEN-T logistics chain.

We will be making full use of the new TEN-T guidelines and Connecting Europe Facility to fund development of ports and improve their links to rail, road and inland waterways networks.

Inland waterways are particularly important for the Netherlands, with its tight mazes of navigable waterway network that unlock all industrial regions.

But for inland waterways to be a success, they have to be properly linked to seaports – and to their surrounding road and rail connections.

Ladies and gentlemen: you are already familiar with the plans that I have proposed for Europe’s ports sector.

Their main objectives include accounting transparency for public money and fair market access. The aim is to promote an environment where ports can compete with each other across borders under equal conditions – and also to reduce today’s legal uncertainties. Only if we achieve this can we help to modernise port services and create a climate that is more attractive to investors.

My intention is to extend the best practices of well-functioning ports to those that have not yet fully realised their potential.

During the drafting phase, we found many examples of good practice in Dutch ports - particularly in Rotterdam - and you will see these reflected in the final proposals.

However, there are some concerns.

Let me briefly mention the transparency of public financing, which remains a problem in many Member States.

Under today's rules, many ports receiving public money do not have to keep separate accounts between their economic activities. This makes it hard to follow the funding streams and ensure there is no breach of state aid rules.

We learned a lesson from the Court of Auditors’ report in 2012. So we are now defining much more clearly how public funds should be used in seaports. The situation must be improved to avoid distortions of competition and clarify where taxpayers’ money should go.

It will help to create a business climate to attract investments.

Regarding the proposed supervisory body:

We are not proposing any new entity for the Member States where existing bodies already handle complaints about charging and market access both effectively and independently.

This is not about creating needless regulatory pressure, or more red tape.

In fact, it’s just the opposite. It is about simplifying procedures and trying to cut unnecessary port costs. We estimate the proposal could save the EU economy up to 10 billion euros by 2030.

Let me conclude by saying what our proposed policy review is not about.

It’s not about disrupting longstanding business models if they are working well, or about interfering with ports’ commercial freedom.

After all, it is not for the EU - or European Commission - to tell ports how to run their business, or to suggest business models, or one that is "one size fits all".

What it is about, however, is respecting basic principles of the internal market, compatible with all forms of port organisation.

It is also about having clearer definitions, greater transparency and fewer restrictions, to remove barriers for new entrants wanting to tender fairly and openly for port services.

Thank you for your attention.

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