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2005-03-22

«Le libéralisme, ce serait aussi désastreux que le communisme.» 

"Liberalism, that would be just as disasterous as communism." Who said this? But of course, no other than one of the pillars of Europe, French president Jacques Chirac, in a meeting with French MPs at the Elysée last week (according to Le Figaro [FR]).

Chirac, faced with the prospect of losing the French referendum on the European constitution due to a clear No-majority among left-wing voters, has launched a public campaign against the Bolkestein directive on the liberalisation of services [my earlier intro].

In a phone-call with Barroso, he demanded that the commission prevents "la concurrence déloyale" in Europe. This was translated in one Austrian newspaper as a defense of "loyal competition", a contradiction in itself that really puzzled me, but presumably this just means "fair competition" in French, or competition on an even playing-field.

According to his spokesman, reports Le Monde [FR], Chirac resolutely reminded Barroso that
"l'Europe, c'est la protection des droits sociaux, c'est la loyauté des conditions de concurrence, c'est le développement des services publics et c'est le respect de la diversité culturelle".
Social cohesion, fair competitive playing-field, development of public services and respect for cultural diversity. Ok, got that. Does the Bolkestein directive lead to an abandonment of these principles?

I don't think so, if it comes along with the right kind of regulation.

Why is the service sector more regulated in Austria than in the UK? No simple answer, but obviously the history of economic development has run a different course in the two places. I believe that today, a majority of the population in each of the countries would prefer their own country's way of dealing with the service sector to that of the other country. So there is a social choice at play, a social preference. Which means that if consumers can choose (after the country-of-origin principle is implemented in a distant future), a majority should stick with their existing type of services, and somebody who wants (or needs) a court-certified translation of a document in Austria would not go a translation company operating under UK law that would according to my own experience not even know the concept.

Now I am a bit gross with Barroso for having defended the Bolkestein directive with the argument that it was somehow a natural consequence of EU enlargement to Eastern Europe. This provokes all this fuzzy "social-dumping" protectionist rhetoric by all sorts of people, not just the president of the Republique Francaise. I believe the outcome could be similar to what was indicated in the previous paragraph: Every service should come clearly tagged with its country-of-origin, and resulting legal framework. In most cases, this would be deterrent enough! So much for cultural diversity, Mr Chirac.

On the other hand, the way I understand it, there really is an unfairness element in the directive concerning different salary levels and different costs of living. If a worker receives a low salary for a week-long construction job in a high-wage country, which he then spends in his own low-wage, low cost of living economy, local service providers in the high-wage country will not be able to match this. Therefore it seems to me that minimum wage limits, labour laws, and also environmental regulation should be in conformance with those of the destination country - so in this sense, I'm preliminarily against a substantial component the country-of-origin principle as well. Such a watered-down version of the country-of-origin principle could however still be effective in significantly reducing barriers to entry, and thereby dynamising the growth of the European service sector, which is so important for reducing unemployment.

And finally, those lush public services, as well as health-services, would likely be at least an opt-out that individual member states like France or Austria could invoke.

Communism of the real-existing type just possibly might be worse.


1 comments:

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