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The Eurocrat Who Shook General Electric

Before Mario Monti, the EU's anti-trust division had a low international profile. But that all changed after he halted the GE-Honeywell merger. Now on his way out, Monti had some choice barbs for France and Germany.


Mario Monti: just as feisty on the way out

Over the past decade, European Union observers have gotten used to the feisty Italian running the organization's anti-trust office.

So it was no surprise when Competition Commissioner Mario Monti unleashed a few chioce barbs at France and Germany --- two of his favorite targets -- on Friday, just months before he is to step down.

Italy needs to understand that "France and Germany, to which the Union owes a great deal, today represents a brake on integration," Monti said in an interview in Italy's Corriere della Serra.

Monti has been a consistent critic of Germany's favorable treatment of state banks and French government policies that subsidize former state monopolies like France Telecom. In the interview he took aim at the relationship between Chancellor Gerhard Schroeder and President Jacques Chirac, saying it was not as effective as the cooperation between British Prime Minister Tony Blair and former Spanish Prime Minister Jose Maria Aznar.

"Ten years of experience in Brussels have convinced me that, to be competitive, Europe must be more (economically) liberal," Monti said. "In simple terms, the Blair-Aznar alignement has shown itself to be more useful that the Chirac-Schroeder one."

The straight talk and blunt manner is one of the reasons Monti is considered among the Commission's most popular, and some would say most well-respected, members. Following his announcement this week that he would retire from his post in November because the Italian government had decided to replace him, EU politicians rushed to compliment Monti.

Commission president-elect Jose Manuel Durao Barroso said he wanted someone with Monti's feisty independence for his own commission. "I would like very much to have someone like Mr. Monti in my Commission," he told lawmakers, according to Reuters.

The muscles from Brussels?

General Electric Logo

General Electric logo

As competition commissioner, Monti flexed the European Union's power internationally in ways never before seen. In his most famous and controversial decision, he blocked General Electric's $47 billion takeover of Honeywell International in 2001. It was the first time a merger approved by the Justice Department had been nixed by a foreign competition authority, and US Treasury Secretary Paul O'Neill called Monti's decision "off the wall." GE is still appealing the decision in European courts three years later.

Debate over the decision also forced Monti to review the EU's merger regulations, and he made some major changes. Now companies are given more time to file applications for approval and are allowed access to evidence filed by other companies who issue objections to the merger. Monti has also created a panel within the commission that vets all of his decisions.

Nevertheless, many credit the newfound power of the Brussels anti-trust authority with Monti's strong leadership and independence.

Tackling Redmond, Paris and Berlin

Mario Monti Microsoft EU

European Commissioner for Competition Mario Monti addresses the media in Brussels on March 24, 2004 -- the day the EU found Microsoft guilty of abusing its "near monopoly" with Windows to squeeze competitors in other markets.

Though Monti has admitted he was ill-prepared for the raft of venomous criticism he was given for the GE-Honeywell decision, it appears to have made him stronger. This year Monti took on his biggest fish to date: Microsoft. Though the software giant succeeded in cutting a deal with anti-trust officials at the US Justice Department, Microsoft didn't fare so well in Brussels, where Monti ordered a record fine of €497 million against Microsoft in an effort to change the company's business practices.

"We're here to defend the welfare interest of consumers on European territory," he said. During his term, Monti levied more than €3.5 billion in cartel fines across Europe.

A lifelong champion of free markets, Monti repeatedly took Chirac and Schroeder to task for market barriers. In the case of Germany, the 61-year-old Monti went after the country's controversial 150-year-old system of providing guarantees to state-owned banks like the Westdeutsche Landesbank Girozentrale that put private banks at a competitive disadvantage. He also attacked France's Chirac for providing government aid to former government monopolies like France Telecom and criticized Paris for providing subsidies to flailing industrial giant Alstom.

"France has become a problem for itself and for Europe," Monti said. "It cannot handle its successes, and often it doesn't see them, and attributes its setbacks, which are often imaginary, to Europe."

"There is no question of how large and powerful a member state is or of its seniority as a member of the European Union," he said. "The rules are there."

His tough stances against Berlin and Paris served as part of the inspiration behind Schröder and Chirac's calls for a "super commissioner" in Brussels who would manage economic affairs and promote European industrial giants as well as temper the feisty spirit with which Monti has infused his Brussels cartel authority.

Professor Laissez Faire

Prior to joining the Commission in 1994, Monti served 16 years as a professor at Italy's elite Bocconi University and also wrote a column for the Italian daily Corriere della Sera promoting free trade at a time when, he recently told the Financial Times, "not only in Italy you had crystallized, ossified and largely government-dominated systems."

Barroso has not yet chosen his competition commissioner, but observers say the top candidates are Britain's Peter Mandelson, the current German Enlargement Commissioner, Günter Verheugen, and France's Jacques Barrot. Mandelson previously served as the UK's secretary of state for trade and industry, and Barrot is the current EU commissioner for regional policy.

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