One of the things holding Europe back from reaping more financial successes are the restrictive anti-competition laws and practices. Outside firm A is proposing to buy European firm B, the courts or government step in, deal falls through. Though necessary at times — such as to prevent monopolies and safeguard finances — meddling protectionist measures like these muck up the free market. We are seeing this time and time again, especially as more foreign funds attempt to buy up both successful and failing European firms.
Another issue, is bankruptcy laws in Europe. In America more liberal business bankruptcy laws have allowed new start-up firms like, say, Google and Digg to flourish in the tech entrepreneurial hotbed of Silicon Valley. Perhaps the reason Europe does not have a Silicon Valley of its own is because of its less friendly, more restrictive bankruptcy laws. The lack of new start-ups and fresh ideas indeed feeds into the lack of competition. And competition is a fuel the market economy needs.
This is related to the European Union summit going on right now in that competition and the free markets has been a major issue. Which leads us to Nicolas Sarkozy, president of France, who received the backing of The Economist because of his reformist economical stance. The free marketers' candidate appears to have reservations about, well, free markets at this EU summit.
HAS Nicolas Sarkozy really dealt a nasty blow to the free-market foundations of Europe? The question has caused much confusion at a European Union summit unfolding in Brussels. It emerged on Thursday June 21st that France’s new president had succeeded in removing “free and undistorted competition” from a list of the EU’s core objectives at the top of a new “reform treaty” being thrashed to replace the defunct constitution.
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During his campaign to become president he presented rival public faces: the pro-business reformer alongside the populist defender of French national interests. The elections won, it is still not clear which of these is the true Mr Sarkozy.
The EU treaty is at the top of this summit's agenda, and is why it is receiving so much attention. Whenever most countries agree, there seems to always be one or two that have their own (selfish) reservations. And yes, for the sake of sovereignty and answering to the voting public, it is important for a country to stand up for what's best for it, but some cases aren't as clear. Sometimes diplomats and leaders should ask themselves, 'Is it worth it to fight for this when there are so many other things I may need to stand up for my country?'
There is, however, good news. Apparently Sarkozy has been convinced to let some things go in his one-man battle against the competition law in the EU treaty. Sarkozy may have gotten "free and undistorted competition" taken out from the treaty's preamble, but
sources in Brussels say a legally binding protocol will be added that protects existing competition law.
So all this fuss over just a superficial word change?
With Mr Sarkozy's change also remaining in place, he will be able to tell the French voters he has defended French jobs.
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French President Nicolas Sarkozy has already said that there are 13 references to free market competition in existing EU treaties, so the EU's powers over competition would not be changed.
Leaders of the 27 EU states are meeting in Brussels to agree the main parameters for a new EU treaty.
A future conference would then decide the final text.
The treaty is designed to replace the planned European Constitution, which was rejected by both French and Dutch voters two years ago.
France's economy is far too bogged down by regulation and government intervention. The public sector often makes the private sector look tiny. Contrary to the wishes of the old left, such a gigantic public sector isn't good for the workers either: notice how there always seems to be a giant worker's protest going on in France? Even though its government-run health system is arguably better than the United States' — and it's free — French doctors get paid one-third of what their American counterparts take home. The government cannot afford much more. While I am in favor of state-run national health services in many cases, France needs to open up and privatize many areas of its economy.
Next bump in the path to a new EU treaty: Poland doesn't want Germany to have too much power. I can sympathize to an extent, since Poland is still being bullied (e.g. energy wise) by Germany and Russia, but playing war card isn't an acceptable move. The trouble is over a voting system of the EU; Poland wants more votes to compensate for lives lost in the Second World War. This Poland versus Germany battle looks to continue, as the United Kingdom throws it's hat into the ring too — questionably at that.
In addition,
draft treaty submitted for debate at the summit makes several concessions to EU member states that had opposed key parts of the planned constitution.
Proposed changes include:
* Removing any mention of the word "constitution"
* Providing countries with a chance to opt out of EU policies in the area of policing and criminal law
* New voting system to approve decisions
* Full-time president of European Council instead of current system where members take six-month turns
* New foreign affairs head and a smaller commission
Correspondents say failure to reach a deal on the treaty would plunge the EU into a fresh crisis as deep as the one that followed the rejection of the constitution two years ago.
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A draft treaty submitted for debate at the summit makes several concessions to EU member states that had opposed key parts of the planned constitution.
Proposed changes include:
* Removing any mention of the word "constitution"
* Providing countries with a chance to opt out of EU policies in the area of policing and criminal law
* New voting system to approve decisions
* Full-time president of European Council instead of current system where members take six-month turns
* New foreign affairs head and a smaller commission
Correspondents say failure to reach a deal on the treaty would plunge the EU into a fresh crisis as deep as the one that followed the rejection of the constitution two years ago.
Britain has also been the target of some complaint. It has backed out of various areas, seeking special treatment, and the negotiating "has been shambolic, according to one insider", says BBC's Europe editor Mark Mardell.
The summit, at two days long, will end today and the future of the EU and the constitution, or whatever they aim to call it, is at stake. Many quarrels deal with political language, and some are bringing up issues of long ago to their advantage.
To see some countries' stances and what they will attempt to exempt themselves from, and more, see here. The agreement of 27 diverse nations — with political rifts between many of them — is a tough goal. However, the European Union treaty must be tackled before people loose yet more hope.
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