Alfred Sant’s speech in ECON committee on the annual competition report

Thank you Mr. President, first I would like to start by congratulating our rapporteur for a very interesting report. Well researched and well presented. Some points that come out it though will need further elaboration. It is clear that competition is one of the major functions of the Commission at the moment; it has become one of the most important political and economic arms of how it acts. Therefor it is important to be both appreciative of what is going on and critical. I think the report we have before us starts on that line, it is appreciative while being at the same time critical. There are a number of problems in the way by which competition policy is being marshaled at the moment. First of all, for representatives in this parliament who come from smaller states, the analysis sometimes made of how competition proceeds is that it is too much of a one size fits all approach. It is wrong.
It is wrong to have this approach of a one size fits all, especially in a number of cases. The way in which the things get applied do no make proper distinction between regions and regions, between countries and countries, between economic situations and economic situations and I think we should be aware of this. Competition applied on a one-size fits all approach across the Union is going to be counter productive at the periphery. Another point as well, we have to be clear that regulation is important but over regulation can be a problem. It can cause new problems, can cause bureaucratization and too many rules, too many procedures, too many amendments to procedures, too many investigations, too many slow ways of doing things hurt business and hurts jobs. That is something that sometimes can be said, this will be the operations of the competition arm of the commission. There is sometimes too many delays in how files are treated, leading to bottlenecks in the implementation of decisions by governments and by corporations. There are two extremes in fact in how these things work out in concrete terms. On one extreme there is how peripheral regions, island regions, isolated regions sometimes get treated. The case for instance of Cyprus Airways not so long ago where a decision was taken and things were operated in such a way that Cyprus Airways had to be dissolved. Now, Cyprus Airways and transport airlines of that sort on peripheral regions have no way by which they can affect competition on a major scale in the Union. They have a minor segment of the market, a regional segment of the market, they can be justified on structural grounds and applying to them a one size fits all competition rules simply is not a good idea. At the other extreme, the Union is not being sufficiently competitive on world markets. We are facing global competition in a big way and it is quite clear that, in competitive terms, Union enterprises have not been up to scratch in global terms. The competitive trades are increasing, not least with the recent signing of the TPP approach between the U.S. and pacific countries and that is going to create the framework for state aid. On a massive scale it can still be used to compete with community enterprises. So I think that at this extreme as well we have to critically evaluate whether our approach on competition is going to really encourage Union champions to be able to compete on a global scale. That has got to be a part of the critical assessment of how, on the larger scale enterprises we need to have mechanisms that give them real push on global markets, even if it is against competitive rules as conceived at present. The TPP is going to be a big challenge to community enterprises on global markets and it is going to allow state aids on a basis that are not allowed in the Union. That is what I think we have to critically evaluate as we go forward. I would like to congratulate as well the rapporteur for his treatment of the digital economy, I think that is right on the ball in saying that you need to have different criteria of assessing how competitive stances is to be introduced and operated but perhaps as well we need to think about how to encourage small enterprises in a proactive way without falling foul of competition policy. There are lots and lots of young entrepreneurs coming into that sector and we need to think about how there could be central aids, central assistance, state aid as well to be able to push them forward, to be able to keep them inside the market. A final point, I think the rapporteur has made a very good presentation about the need to distinguish between the legislature and the implementer of the regulations. It is clear that you cannot be judge and jury at the same time. It is a very important point, I know that at the Commission it is creating a bit of tensions because the commission department responsible does not want to see itself split into two but I think there has to be a structural distinction, as the rapporteur is advising, between who puts forward the regulations and who is going to implement them in practice as well as the need to have some kind of oversight on a democratic and transparent basis. Thank you very much Mr. President.