BRITISH firms are losing out in the battle for the £1,000 billion European public works market because other governments are unfairly discriminating against them and rigging the rules to help their own companies, a report will disclose today. Gordon Brown will tomorrow call on Europe to reform its single market rules after a year-long review commissioned by him found that huge obstacles stand in the way of fair competition in European markets, harming British and other EU businesses.
Today's report, from Alan Wood, chief executive of Siemens, the engineering and electronics conglomerate, will show big failings in the much-vaunted EU single market. He finds that complex rules, unfair national preferences, and a wavering commitment to competition in other parts of the EU are holding back the creation of a truly fair and competitive market for government contracts. The UK pays less state aid than any of the 15 older member states. State aid in the EU (excluding aid for railways) was €49 billion (£34 billion) in 2002 (0.56 per cent of GDP). Aid in the UK was €3.9 billion (0.25 per cent of GDP). Examples where large amounts of state aid have been given include: €2.2 billion from the French Government to Alsthom (July 2004); €3.5 billion in 2002 for the German coal industry: and €1.4 billion for the Italian national airline, Alitalia, in the 1990s. It is now seeking further aid.
British companies who gave evidence to Mr Wood requested that their names be kept confidential. He did not find that the rules were broken but they were certainly interpreted in a way that went against British companies' interests. Many felt that national competitors were unfairly favoured. Mr Wood's report calls for action by EU states to open up markets and to eliminate bad practice. |