Sunday, April 10, 2005

Another EU reform dropped to succour the French

Another much needed reform to make the EU more competitive bites the dust in order to try and avert a French NON to the EU Constitution. Some in Brussels might very well be wondering if the EU might not be better off without the French.

Brussels delays overhaul of state aid

A crucial policy paper mapping out plans to overhaul the European Union's state aid regime was postponed this week, in part over concerns that it might affect the French referendum on the new European constitutional treaty.

The Commission and the French government have repeatedly clashed over state aid, especially state-backed bailouts for large French companies such as Alstom, Bull and France Telecom. Brussels has the power to block or limit such injections of state funding
The European Constitution has proved divisive and controversial - it has in many respects been a step too far. The wisdom of seeking its ratification so soon after EU enlargement, and the divisions caused by the Iraq war, is looking increasingly suspect - as a French General is said to have remarked after witnessing the Charge of the Light Brigade - "C'est magnifique, mais ce n'est pas de la guerre!"

A further thought on the previous posting. I would guess that Brussels may suggest a minimum rate of corporation tax - it is isn't quite harmonisation via a flat rate, it would guarantee much needed income for squandering governments, it would still allow a degree of tax competition, and, it would probably satisfy Chirac and Schroeder.