Meeting on Asian Competiton Descends into EU In-Fighting

In informal talks before meeting later in the day with counterparts from 13 Asian countries, the ministers struggled to put recent spats over protectionism behind them and show a strong commitment to strengthening competition in the European market.

Austrian Finance Minister Karl-Heinz Grasser, who hosted the talks in Vienna, told journalists: "The completion of the internal market must be a priority in all sectors with a clear timetable. Our markets are still too fragmented."

British finance minister Gordon Brown, a staunch defender of open markets, presented a paper to his colleagues warning that it was only with a strong European market that the EU would be able to rise to the challenges raised by competition from Asia.

"With multinational trade and investment now the key to future prosperity, we need to be vigilant and avoid protectionism gaining ground within the EU," the paper said.

"Europe's policy priorities should be focused on equipping Europe with the capacity to adapt, respond and benefit from the challenges of globalization," it added.

Attending the talks as a representative of the business community, the chairman of Spanish telecoms giant Telefonica, Caesar Alierta, said that competition on Europe's market stimulated innovations that made European companies stronger. "We need to be always in the height of innovation and to be in the height of innovation we need to have the single market."

Protectionism lurking behind globaliszation talks

The talks come amid growing concerns about rising protectionism between European countries after a series recent corporate deals in which the French, Spanish and Polish governments moved to favor domestic companies at the expense of firms from other EU countries.

But one official speaking on condition of anonymity said that the ministers spoke in "coded language", stopping short of naming and shaming. "They did not criticize the protectionist attitudes of specific countries but spoke of the need to complete the internal market," the official said.

Britain's Brown said in his paper that the European market needed an independent panel of experts to probe markets in key industries such as energy and bolster competition.

"We are today proposing that where restricted competition is harming the single market the European Commissioner for Competition (Neelie Kroes) should set up an independent panel of experts to investigate sectors which fail to liberalize and where competition is not functioning effectively," his paper said.

No need for further EU competition institutions, says Almunia

However, EU Economic and Monetary Affairs Commissioner Joaquin Almunia insisted that another competition authority was not needed because the European Commission, the EU's anti-trust watchdog, was already doing the job well.

"I think that everyone agrees that the commission, in enforcing competition rules, acts in absolute independence," he said. "Sometimes I hear the opposite, sometimes critics say the commission is too independent," he added.

French Finance Minister Thierry Breton also poured cold water on Brown's proposal, saying that it would be "useless to create another layer" of regulatory authority that would only "increase bureaucracy".