There Goes The Neighborhood

The new French President just removed the notion of competition from the proposed EU constitution, making the EU useless for the Brits. One wonders when they’ll notice.

(my ellipsis):

The European Union’s 50-year-old commitment to “undistorted competition” has been scrapped from a list of the bloc’s objectives in a French coup that lawyers argue could undermine Brussels’ fight against protectionism and illegal state aid.

Nicolas Sarkozy, French president, secured the change, on the eve of an already tense Brussels summit to allay concerns in his country that the EU has become too “Anglo-Saxon”.

The surprise move came as EU leaders gathered in Brussels to try to agree a revamped version of the bloc’s moribund constitutional treaty. The new text would update the Union’s rules and create a new EU president and foreign minister.

Mario Monti, the former EU competition commissioner who clashed with Mr Sarkozy over the French bail-out of the engineering giant Alstom, said the change would undermine the Commission’s role as an antitrust watchdog, including taking on multinational giants, including ones based in the US…

The proposed deletion of competition – one of the Union’s founding objectives – was smuggled into the draft treaty by the German EU presidency.

In the original constitution, one of the Union’s main objectives was listed as “an internal market where competition is free and undistorted”. France has now persuaded Berlin to put a full stop (period) after the words “internal market” in the new treaty.

Most EU nations are lowish trust – the Brits are the only big exception – and low trust nations have mostly family businesses plus a few state-funded champions, like Airbus.

The Franco-German hack makes it OK for the French, Italians, Spanish, Germans, Greeks etc to favor their local companies with subsidies and sweetheart procurement deals, and to sandbag nasty foreign competitors.

In the short term, that doesn’t hurt most EU nations since they’re net beneficiaries of EU funding, most of which comes from the Germans and Brits.

But the Brits are high trust and their economy is fueled by the dreaded undistorted competition.

So now Brit businesses will be shut out of the EU while Brit taxpayers provide the bulk of its funding.

That’s not going to work, but it’ll be interesting to see how long the Brits take to wise up.

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