Pure Politics

Abuse of Power

The Times

First published July 23.

A leader article matters that will become very clear.
 
 

For quasi-judicial, read "ignore the law".

The European Commission's craven decision to outflank the European Court of Justice is an unmitigated disgrace. Last month the Court ordered the annulment of a competition-distorting £2 billion subsidy to Air France. In response, the Commission, which is entrusted with enforcing open and fair competition in the European single market, has decided to reinvent the facts of the case retrospectively in order to let Air France - and, of course, France - off the judicial hook. This legalistic sleight of hand is a betrayal of trust and an abuse of power.

Law in the European Union is, apparently, not what the Court says it is, but what bureaucrats decide that it means. Humpty Dumpty would be proud of Karel Van Miert, the Competition Commissioner, who has calmly surrendered his credibility, and even more so of Neil Kinnock, the Transport Commissioner, who yesterday described this extraordinary manipulation of justice as an example of the Commission exercising its "quasi-judicial" powers. For quasi-judicial, read "ignore the law".

European businesses that play by market rules will conclude that when it comes to a conflict between powerful EU governments and the rule of law, the Commission will side with power against justice. So will those that bend the rules. So should Tony Blair, whose boast has been that his Government's active courtship of Brussels was making the EU a better place to do business and a more competitive player on world markets. This test case was never just about Air France; it was about the permissibility of government subsidies to failing EU companies and sectors, which currently total £40 billion a year.

 

When it comes to a conflict between powerful governments and the rule of law, the Commission sides with power against justice.

These subsidies do real damage to real people. Germany's £3 billion subsidy to its coal industry, for example, which was retrospectively approved by the Commission only last month, keeps British coal, produced at a third of the cost of German tonnage, out of German markets. Bad business is driving out good. RJB Mining, which has asked the Court to annul the June decision, now has little hope of seeing justice prevail.

British Airways and the other airlines which, with the support of their governments, challenged the legality of the Air France subsidy on the ground that it unfairly discriminated against companies that have to raise their capital in the marketplace, knew that it was unlikely that Air France would ever actually reimburse the £2 billion paid to it in 1994. Under a system that the Commission claims it wants to ban in future, the airline could have appealed against the ruling in the French courts. Even so, at considerable expense, the airlines pursued this case for four years in the expectation that a legal victory would set an important precedent for limiting future state aids. In so doing, they acted not merely in their own commercial interests; they struck a blow for free markets, justice and European prosperity and jobs.

The Court's judgment on Air France did offer a legal loophole by confining itself to the precise reasons for the Commission's decision to allow the French Government to bail the airline out. But instead of exploiting this technicality, it was fully open to the Commission to accept the decision and order repayment of the money. This, as Sir Leon Brittan and his Swedish and German colleagues deserve praise for insisting, is what Brussels should have done. Mr Kinnock's excuse is that the Air France case is a hangover from a past era when massive state aids to airlines were the norm. That is like Barabas in Marlowe's Jew of Malta, shrugging off a crime because it "belonged in another country, and besides, the wench is dead". The British Government has said so far only that it will "study" this outrageous decision. It would compound the injustice if it were to acquiesce in the use of law against the law and accept this abuse as just a game that Europeans play.


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This page updated September 5, 1998
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