Tuesday

4th Oct 2022

Mario Monti to draw up single market report

  • Mario Monti has agreed to draw up the new report (Photo: European Commission)

Former commissioner Mario Monti has been asked by the current EU executive to draw up a new report on how the EU should re-launch its single market.

In a letter to Mr Monti, made public on Tuesday evening (20 October), commission president Jose Manuel Barroso says the report should address the growing tide of economic nationalism and outline measures to complete the EU's currently patchy single market.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

However the new initiative does not mirror the "high-level group" method recently used to come up with proposals on financial regulation, and no deadline has been set for the document's hand-in.

"Should you accept this mission, you will conduct it under your sole responsibility and you will report directly to me on progress and conclusions. You will be able to rely on the Commission's expertise and support," says Mr Barroso in the letter. Mr Monti has agreed to take on the task.

Currently president of Bocconi University, Mr Monti is a former internal market commissioner (1995-1999), but is perhaps best known for his tough battles with big business while handling the competition portfolio (1999-2004).

Economic nationalism

Analysts are divided as to how badly the EU's single market has suffered from the financial and economic crisis.

With national banks on the edge of collapse late last year, member state government's independently announced deposit guarantee schemes and billion-euro recapitalization plans.

"Clearly state aid in the financial sector was needed, because there was a real risk of major problems, not only for individual firms but for the financial sector and the European economy as a whole," senior fellow at the Brussels-based Bruegel think tank, Andre Sapir, told EUobserver.

By updating its state aid guidelines at the time, the EU hoped to prevent new internal market distortions and is now currently examining a number of government aid measures to the financial sector suspected of being greater than actually needed.

"I think the sequencing of this was perfectly correct," says Mr Sapir.

However, protectionist alarm bells started to ring when a number of governments then turned to bailout their creaking car sectors whose overcapacity was already visible before the crisis.

French President Nicolas Sarkozy famously announced in February that national car manufacturers receiving money from a proposed €6 billion aid package should relocate production plants back to France, sparking fury in other member states.

In the end, Mr Sarkozy rowed back on the controversial measures and his aid plan was approved by the European Commission.

"These are issues that affect us all ... and we must make sure that there is a level playing field where EU competition law applies," German chancellor Angela Merkel said at the time.

Overcapacity

But the Chancellor now finds herself at the center of the latest state aid controversy, with several EU governments concerned about possible strings attached to German aid promises to the chief Opel buyout contender, Magna.

German aid, they fear, will come on condition that job cuts are made disproportionately in Opel plants outside the EU's largest economy.

"We will have to examine the exact terms and conditions attached to the aid once those terms and conditions have been finalized," the Commission's competition spokesman Jonathan Todd said on Tuesday.

"We are still awaiting information from the German authorities about the final outcome of the financial package," he added.

But while emergency state aid was justified in the financial sector and competition commissioner Neelie Kroes appears to be taking a tough stance regarding automobiles, the debate now needs to move on, says Mr Sapir.

"One should draw some lessons from what Europe did 20 years ago in the steel sector. We need a plan on how we are going to handle this over capacity and not get into the dangerous disputes between countries seeking to outbid one another on state aid," he says.

"This has been the sad element of the Opel case," he adds, an indication of the difficult issues Mr Monti must tackle when drawing up his report.

Exclusive

EU officials were warned of risk over issuing financial warning

The European watchdog for systemic economic risk last week warned of "severe" threats to financial stability — but internal notes show top-level officials expressed "strong concerns" over the "timing" of such a warning, fearing publication could further destabilise financial markets.

News in Brief

  1. Czechs warn joint-nationality citizens in Russia on mobilisation
  2. Greece to unveil proposal for capping EU gas prices
  3. Four dead, 29 missing, after dinghy found off Canary Islands
  4. Orbán: German €200bn shield is start of 'cannibalism in EU'
  5. Lithuania expels top Russian diplomat
  6. Poland insists on German WW2 reparations
  7. Russia halts gas supplies to Italy
  8. Bulgaria risks hung parliament after inconclusive vote

Stakeholders' Highlights

  1. The European Association for Storage of EnergyRegister for the Energy Storage Global Conference, held in Brussels on 11-13 Oct.
  2. EFBWW – EFBH – FETBBA lot more needs to be done to better protect construction workers from asbestos
  3. European Committee of the RegionsThe 20th edition of EURegionsWeek is ready to take off. Save your spot in Brussels.
  4. UNESDA - Soft Drinks EuropeCall for EU action – SMEs in the beverage industry call for fairer access to recycled material
  5. Nordic Council of MinistersNordic prime ministers: “We will deepen co-operation on defence”
  6. EFBWW – EFBH – FETBBConstruction workers can check wages and working conditions in 36 countries

Latest News

  1. Last-minute legal changes to Bosnian election law stir controversy
  2. EU wants probe into alleged Nagorno-Karabakh war crimes
  3. EU officials were warned of risk over issuing financial warning
  4. EU debates national energy plans amid calls for more coordination
  5. What Modi and Putin’s ‘unbreakable friendship’ means for the EU
  6. EU leaders have until Friday for refugee resettlement pledges
  7. Cities and regions stand with citizens and SMEs ahead of difficult winter
  8. Editor's weekly digest: A week of leaks

Join EUobserver

Support quality EU news

Join us