Wednesday, 24 September 2003


When it comes to non-compliance with EU rules or international law there are two kinds of perpetrators. The first type is subject to legislative and administrative problems resulting from organizational, legal, technical and financial factors. The second one sees non-compliance as a political game to be played for domestic reasons. It is becoming increasingly clear that France falls within the second category. When it comes to the three main forms of non-compliance — refusal to enact, refusal to comply and refusal to enforce — France is the EU’s least obedient country.

According to the latest figures, France has the worst record of all European countries for flouting EU regulations and failing to implement community directives. It is well-documented that the French break more free-market agreements than any other EU country and are the slowest to adopt agreed trade legislation. Of 1,598 internal market infringements under investigation by the European Commission, France heads the list with 220 cases. Italy is second with 200 infringement cases pending. Between them, the two countries account for more than 25 percent of all actions launched by the Commission against the 15 member states. Infringement proceedings involve a warning letter to governments and are the first step towards full legal action in the European Court of Justice in Luxembourg. Infringement cases can take more than two years to resolve and take up a considerable amount of resources both in the Commission and the member states.

Despite being zealous advocates of closer European integration, the French are guilty of the most flagrant foot-dragging of any EU state when implementing new rules. Here are just a few of the judgments of the European Court of Justice against France:

* Failure to comply with community measures on British beef;

* Failure to transpose a Council Directive on a general system for the recognition of higher education diplomas;

* Failure to notify national measures transposing Directive of the European Parliament and Council concerning the processing of personal data and the protection of privacy in the telecommunications sector;

* Barriers to imports of Spanish strawberries;

* Incorrect application of the Council Directive concerning the quality of bathing water;

* Limited range of grades preventing the marketing in France of articles made of precious metals which come from other member states.

The long list of violations also includes a refusal to obey the law on biotech patents, maintaining an illegal ban on food additives, using obstructionist measures to prevent lawyers from EU countries working in France, and many others.

The French are Europeans when it suits them. France has the reputation for being a prickly partner ready to claim exceptional circumstances when its own interests clash with those of the community. It used to be Britain which said “can’t and won’t” when it did not agree with the Union regulations, but now France has become the outsider. Paris’ cherry-picking approach to EU policy has traditionally infuriated the Commission. People in Brussels are increasingly making the point that France must learn it can no longer manipulate and ignore EU institutions for its own convenience.

France is also something of a nuisance to EU competition watchdogs. One of the Commission’s most important and most delicate tasks is to ensure that money granted to a company by a member state does not amount to an unfair subsidy. Various forms of aid to a company are banned, including state grants, interest relief, tax relief and state guarantee or new holdings. Under EU competition law, companies on the brink are required to reduce their presence on the market and restrict the element of state aid to a strict minimum. They are also required to contribute to the restructuring effort themselves. France is under investigation for alleged support to Alstom (which makes high-speed trains), France Telecom, Electricité de France (EdF) and computer company Bull.

In the case of Alstom, the French government plans to take a 31.5 percent stake in the embattled group for €2.8 billion. It is clearly state aid to an enterprise, but in its defense Paris has argued that the failure of a group that employs 75,000 employees in Europe is in no one’s interest and it was just a simple share transaction.

Regarding France Telecom, the ailing telecommunications operator was given a €9 billion credit line by the French government, which insisted it “comprised no element of state aid”.

In the case of EdF, Brussels has launched formal proceedings over French state guarantees given to the electricity giant, which has expanded aggressively in other EU countries from a base of privileged protection at home.

As for Bull, a server and software maker which is fighting for survival, the Commission insists that it must repay the €450 million rescue loan it received from the French state.

If France finds itself increasingly in the Commission’s sights it cannot count on too much support from other EU member states. For example, German companies such as Siemens, which is a direct rival of Alstom, also face difficult market conditions and yet have no prospect of state aid.

Another area of rebellion has to do with ballooning budget deficits. Under the European Union’s Stability and Growth Pact, euro-zone countries may not run deficits of more than 3 percent of gross domestic product and should aim for surpluses in times of economic growth. Failure to respect the ceiling leaves countries liable to stiff fines, but France has forecast a 4 percent deficit this year and does not seem to care much that its economy is dragging down the rest of the euro zone. The French argue that they like Europe, but that it’s also necessary for Europe to like growth and jobs. No country has yet been fined for breaching the stability pact. Both France and Germany broke the EU deficit cap last year, are expected to so again this year, and under EU rules should be fined 0.5 percent of gross domestic product — a massive penalty. In the end, it is probable that Europeans will head towards a compromise that gets around the pact’s rules. A long-term solution, however, will not be reached until the rules have been renegotiated. In the meantime, breaking them, as France does, is not a good sign for Europe.

It is time for France to realize that it cannot have its cake and eat it too or, as they say “le beurre et l’argent du beurre”. France should lead by example and not use management by exception as a way of life.

French influence in the EU can no longer be exercised through a mixture of posturing and bullying. An enlarged Union will be one in which alliance-building, negotiation and compromise are crucial. It will be one in which strong institutions, notably the Commission and the European Court of Justice, are necessary antecedents for an effective Europe. Paris needs to rethink its attitude towards supranational institutions and its own reluctance to comply with their strictures.

Christian D. de Fouloy

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