French Industry Minister, Arnaud Montebourg, has recently censured the EU’s competition law by saying the current anti-competition law prevents from the creation of European-wide business leaders. The minister described the law as ‘stupid’ and ‘counter-productive’.
Mr. Montebourg said that the competition law is too obsolete for today’s world, and therefore must be overcome and replaced. He thinks that too stringent competition rules fragment Europe’s industrial potential and do not support and promote the emergence of giant corporations when compared to those in the United States. In his opinion, this is where a real problem lies. By looking at the market capitalization of European telecommunication companies in contrast to the US Verizon, Mr. Montebourg argues that “Europe organized the balkanization of its companies by chasing down state aid. It was a stupid and counter-productive policy.”
The new world order requires that the European Union must support its own firms, just like what China, the United States and most emerging countries are doing. He recalls that during the economic crisis banking sector unproductively obtained about 500 billion EUR just to create ‘debt and again debt’ while the industry ‘got zero’. “This is a wrong recipe against the crisis, the recipe that has never worked”, the minister said.
In his opinion, both fiscal and monetary policies of the eurozone are devastated. Moreover, the currency is too strong and thus too expensive. Mr. Montebourg quoted Nobel-winning economist Joseph Stiglitz saying that never has any country emerged from a crisis without using monetary policy. Therefore, his policy advice is to alter Europe’s monetary policy quickly. Otherwise, he thinks, the EU will be witnessing a gradual comeback of the United States and Japan from the crisis, while doing nothing about its own zero growth. Therefore, the minister suggested that the EU should be extremely cautious and patient while negotiating the trade pact with the United States. Any rushed solution could cause anger on both sides of the Atlantic, he envisaged.
