The European parliament on Wednesday (Oct 22) overwhelmingly approved the appointment of British Baroness Catherine Ashton as the European Commissioner in charge of trade. In a plenary session in Strasbourg, 538 MEPs voted for the new Commissioner for European trade policies. There were 40 votes against her appointment and 63 abstentions.
Ashton was nominated earlier this month by the British government to succeed Peter Mandelson, following his appointment to the British government.
The President of the European Commission and the Council - the institution that regroups the Member states - having already given the green light for the appointment of the first woman commissioner for trade, it remained only for parliament to vote.
On Tuesday (Oct 21), Ashton had a three-hour hearing in parliament during which she was tested on trade. She is now a member of the European Commission in her own right till the European elections due in June 2009 when a new Commission will be appointed.
During the hearing in parliament, MEPs posed questions to the commissioner-designate and she showed good knowledge of her new trade portfolio. In particular, Ashton, who is an economist by training, was asked about the ongoing financial crisis, future of the Doha Round and its overtaking by the bilateral trade negotiations.
With a short time to prepare as a result of the fast-tracking of the approval process, the Commissioner got praise from the European law-makers. Spanish MEP Ignasi Guardans, vice-President of the parliament trade committee said, "in her responses to some tough and often highly politicised questioning, she demonstrated strong political skills and composure which is evidence of good negotiating skills."
“The committee had some natural concerns about her lack of direct experience of international commerce or foreign affairs but with such a short time to prepare, she persuaded the committee that she understood the link between trade and the impact on the European small and medium sized business sector and jobs,” Guardans added.
After the approval by the parliament, she said she would pay her first visit to WTO director general Pascal Lamy in Geneva later this week to assure him that pursuing a successful Doha Round remains absolutely central to Europe’s trade policy.
Responding to the confirmation of Ashton as new trade commissioner, Benedict Southworth, Director of the World Development Movement, said: “The European Commission needs to radically overhaul its trade policy and Baroness Ashton is now in a unique position to do so. The business-as-usual approach of wholesale deregulation and trade liberalisation is out of step with today’s climate of global financial, food and energy crises.”
“Instead, sustainable development and tackling poverty must be at the heart of European trade policy. Baroness Ashton now has an excellent opportunity to draw a line under the past and Commissioner Mandelson’s legacy of unfair trade deals that hit the poorest hardest,” Southworth added.
Showing posts with label Commission. Show all posts
Showing posts with label Commission. Show all posts
Thursday, October 23, 2008
Tuesday, November 13, 2007
Gas era set to dawn in India
Ships equipped with re-gasification gear an answer
Power shortages leading to blackouts are already taking their toll on production, and then the cumulative effect is filtering down to export markets. That’s the scene blurring grand visions of making India a manufacturing hub to alleviate poverty, which keeps more than two-thirds of the rural population engaged in a vicious cycle of an agricultural sector dependent on weather unpredictability.
With an economic boom touching nine percent over the last few years showing no sign of slowing down, India’s insatiable hunger for energy has not been matched by a proportionate increase in supply over the years. Estimates point that India’s energy needs are set to grow by 40 percent, moving it from sixth slot to fourth position in the world’s top consuming nations by 2012.
“Cleaner burning and more efficient than coal,” coupled with the fact that tonnes of stranded gas around the world are just looking for a market, natural gas seems to be the answer to the ever-increasing demand for power in the present Indian environs, where the ways and means to provide sustainable and reliable solutions are far from clear.
Government figures show that the country’s domestic gas supply is 65 million standard cubic metres per day, while demand stands at 231 mmscmd and the projections put it to rise to 313 mmscmd by 2011-2012. India’s Planning Commission in its approach paper to its 11th Five-Year Plan that an ongoing sequence since it was launched five decades ago identified that among other factors, “... above all, power supply are not comparable to those prevalent in our competitor countries.”
Warning that, “... this gap must be filled within the next five to 10 years if our enterprises are to compete effectively,” the paper stressed that, today, Indian companies are not asking for state protection but at least, “expect a level playing field.” It may be noted that although industrial units are savvy about their own power plants, the acute lack of feeding fuel remains a major stumbling block. With focus shifting to cleaner industrialisation, there is a gas era ready to come of age, but latest government figures show the country failed to import only a third of the gas it wanted in 2006-2007.
One of the major reasons is the inadequate infrastructure in the country to handle gas imports as only two of the planned four terminals for LNG (Liquefied Natural Gas) re-gasification viz. Shell’s Hazira terminal and Petronet’s Dahej terminal, are operating while the Kochi terminal and the Dabhol are yet to get commissioned. These special terminals are needed as gas is shipped in liquid form and needs to be re-gasified when the ship berths. Lack of such specialised terminals left not only the power sector but also the fertilizer sector literally gasping for gas.
The geo-political situation around the world has cast its long dark shadows on the Indian government’s options to get international pipeline projects like the Iran-Pakistan-India, the Myanmar-India and the Turkmenistan-Afghanistan-Pakistan-India to deliver.
According to tough-talking sector observers, the first one has an American negative influence on it, the second seems to be lost to Chinese efforts, while the third is losing to its preferred sister project moving toward Russia on its journey to the more lucrative market of Europe, giving leverage to Moscow over Brussels in energy matters.
Dashing any hopes of salvaging the Myanmar-India gas pipeline project, the Oil and Natural Gas Corporation Limited, ONGC – Videsh Limited or OVL scrapped the project in the footsteps of the Gas Authority of India Limited, GAIL. R S Butola, Managing Director of OVL said in New Delhi on May 14: “Since Bangladesh has disagreed to our proposal, the project is now becoming a costly affair while China is trying hard to procure gas from Myanmar through a pipeline because the country has been suffering from a huge energy crisis for long.”
He ruled out any further bid to get back the pipeline project without a cost-benefit analysis. Such a delayed scenario for pipelines leaves the door wide open for imports of gas through ports. The Indian west coast is already dotted with ports which have emerged as leading container handlers with overstretched capacity and the time is ripe for the eastern ports of Kolkota, Haldia and Paradeep to take the initiative to grab this golden opportunity to become a hub of gas imports to meet the energy needs of the parent state, and for the onward transport to other parts of the country.
Usually, it will cost around USD 500 million to equip each port with a re-gasification terminal and a number of years of construction before gas starts flowing to consumers, but pundits offer a new pioneering working model showing a simple way out. With tailor-made delivery-driven solutions catering to exponentially increasing demands for gas, there are technologically advanced vessels which have the facility to re-gasify LNG onboard and discharge natural gas into the pipeline system through an “Energy Bridge” process. The time frame for opening the tap to consumers for this unique way of the re-gasification equipped vessels docking at the ports needs just a year from the time the final decision is taken to when work starts to install various discharge points like a buoy (deepwater port), a turret (shallow water port) or quayside.
Moreover, this also takes care of concerns of vocal environmentalists who have been campaigning against new terminals aimed to boosting imports of LNG. One market expert on India predicted that the move can lead to frenzied investment from abroad in Bengal for constructing short delivery pipelines to industrial units across the region. Calling it “the financial backbone of the future for Bengal (an eastern Indian state),” which is a state striving to transform its poor agro-economy into an industry powered financial giant in the coming years, the expert said in Brussels, “The state can contribute with tax rebates during high risk initial phases with applicant shipping companies committing to help in getting gas contracts at affordable prices.” Time will show if the industry and the state can take advantage of this opportunity to agree on terms of development of gas inlets and beyond.
Written for New Europe, the European Weekly on May 19, 2007 - Issue : 730
Power shortages leading to blackouts are already taking their toll on production, and then the cumulative effect is filtering down to export markets. That’s the scene blurring grand visions of making India a manufacturing hub to alleviate poverty, which keeps more than two-thirds of the rural population engaged in a vicious cycle of an agricultural sector dependent on weather unpredictability.
With an economic boom touching nine percent over the last few years showing no sign of slowing down, India’s insatiable hunger for energy has not been matched by a proportionate increase in supply over the years. Estimates point that India’s energy needs are set to grow by 40 percent, moving it from sixth slot to fourth position in the world’s top consuming nations by 2012.
“Cleaner burning and more efficient than coal,” coupled with the fact that tonnes of stranded gas around the world are just looking for a market, natural gas seems to be the answer to the ever-increasing demand for power in the present Indian environs, where the ways and means to provide sustainable and reliable solutions are far from clear.
Government figures show that the country’s domestic gas supply is 65 million standard cubic metres per day, while demand stands at 231 mmscmd and the projections put it to rise to 313 mmscmd by 2011-2012. India’s Planning Commission in its approach paper to its 11th Five-Year Plan that an ongoing sequence since it was launched five decades ago identified that among other factors, “... above all, power supply are not comparable to those prevalent in our competitor countries.”
Warning that, “... this gap must be filled within the next five to 10 years if our enterprises are to compete effectively,” the paper stressed that, today, Indian companies are not asking for state protection but at least, “expect a level playing field.” It may be noted that although industrial units are savvy about their own power plants, the acute lack of feeding fuel remains a major stumbling block. With focus shifting to cleaner industrialisation, there is a gas era ready to come of age, but latest government figures show the country failed to import only a third of the gas it wanted in 2006-2007.
One of the major reasons is the inadequate infrastructure in the country to handle gas imports as only two of the planned four terminals for LNG (Liquefied Natural Gas) re-gasification viz. Shell’s Hazira terminal and Petronet’s Dahej terminal, are operating while the Kochi terminal and the Dabhol are yet to get commissioned. These special terminals are needed as gas is shipped in liquid form and needs to be re-gasified when the ship berths. Lack of such specialised terminals left not only the power sector but also the fertilizer sector literally gasping for gas.
The geo-political situation around the world has cast its long dark shadows on the Indian government’s options to get international pipeline projects like the Iran-Pakistan-India, the Myanmar-India and the Turkmenistan-Afghanistan-Pakistan-India to deliver.
According to tough-talking sector observers, the first one has an American negative influence on it, the second seems to be lost to Chinese efforts, while the third is losing to its preferred sister project moving toward Russia on its journey to the more lucrative market of Europe, giving leverage to Moscow over Brussels in energy matters.
Dashing any hopes of salvaging the Myanmar-India gas pipeline project, the Oil and Natural Gas Corporation Limited, ONGC – Videsh Limited or OVL scrapped the project in the footsteps of the Gas Authority of India Limited, GAIL. R S Butola, Managing Director of OVL said in New Delhi on May 14: “Since Bangladesh has disagreed to our proposal, the project is now becoming a costly affair while China is trying hard to procure gas from Myanmar through a pipeline because the country has been suffering from a huge energy crisis for long.”
He ruled out any further bid to get back the pipeline project without a cost-benefit analysis. Such a delayed scenario for pipelines leaves the door wide open for imports of gas through ports. The Indian west coast is already dotted with ports which have emerged as leading container handlers with overstretched capacity and the time is ripe for the eastern ports of Kolkota, Haldia and Paradeep to take the initiative to grab this golden opportunity to become a hub of gas imports to meet the energy needs of the parent state, and for the onward transport to other parts of the country.
Usually, it will cost around USD 500 million to equip each port with a re-gasification terminal and a number of years of construction before gas starts flowing to consumers, but pundits offer a new pioneering working model showing a simple way out. With tailor-made delivery-driven solutions catering to exponentially increasing demands for gas, there are technologically advanced vessels which have the facility to re-gasify LNG onboard and discharge natural gas into the pipeline system through an “Energy Bridge” process. The time frame for opening the tap to consumers for this unique way of the re-gasification equipped vessels docking at the ports needs just a year from the time the final decision is taken to when work starts to install various discharge points like a buoy (deepwater port), a turret (shallow water port) or quayside.
Moreover, this also takes care of concerns of vocal environmentalists who have been campaigning against new terminals aimed to boosting imports of LNG. One market expert on India predicted that the move can lead to frenzied investment from abroad in Bengal for constructing short delivery pipelines to industrial units across the region. Calling it “the financial backbone of the future for Bengal (an eastern Indian state),” which is a state striving to transform its poor agro-economy into an industry powered financial giant in the coming years, the expert said in Brussels, “The state can contribute with tax rebates during high risk initial phases with applicant shipping companies committing to help in getting gas contracts at affordable prices.” Time will show if the industry and the state can take advantage of this opportunity to agree on terms of development of gas inlets and beyond.
Written for New Europe, the European Weekly on May 19, 2007 - Issue : 730
Banana sector gets slippery
Judgment day arriving as industry awaits Kroes’ moves
Investigations take time and when it comes to investigating in environs full of banana peels, the going gets slippery, slowing down proceedings further. There was, however no slip last week on the part of Jonathan Todd, commission spokesman for competition commissioner Neelie Kroes as he told journalists, “Anti-trust inquiry is ongoing.”
Todd was replying to a question about the latest status of a “cartel probe” launched two years ago into a suspected cartel of banana wholesalers. In 2005, Kroes team had raided the offices of Europe’s largest fruit distributors after Chiquita, the world’s biggest producer of bananas blew the whistle on an alleged cartel in the European banana markets.
At the time, Fyffes of Ireland, Dole and Del Monte of the US had admitted that they had been among the targets of the raids while the European commission had confirmed the “unannounced inspections” at the premises of several producers and distributors of bananas and pineapples in Germany, Belgium, the United Kingdom and Ireland.
“The Commission has reason to believe that the companies concerned may have violated Article 81 of the EC Treaty, which prohibits price fixing and market sharing practices,” the commission statement had said clarifying that raids did not mean that the targeted companies are guilty adding that a full-scale inquiry would be carried out.
The investigation was launched at the instance of Chiquita, based in Cincinnati in the US when it had it had informed the EU competition authorities after the management became aware that several of its employees had been sharing price information with rival companies for “many years.”
Commenting on the inquiry, reliable sources in the European commission and European banana industry sector told New Europe that the regulators are targeting the five biggest banana companies – Chiquita, Del Monte and Dole of the United States, plus Noboa of Ecuador and Fyffes of Ireland for an illegal cartel activity.
The sources also confirmed recent media reports that at the end of two years the European commission has more concrete information and formal charges may be initiated before the end of the current year.
Although Commissioner Kroes has broken many records during her tenure for imposing fines on cartels, the market observers feel that the fines, if imposed may stay within the precedent cases of about 10 percent of annual sales. Moreover, it may take months before the case comes to an end as the accused firms would have several months time period to defend themselves.
One market pundit alleged that the timing is coinciding with the ongoing transatlantic banana war which got reignited last year when Ecuador was joined by the US, Columbia and Panama to open another tug-of-war a decade later.
December 15, 2006 saw the first day of the proceedings at Geneva of revival of the “1990s banana wars” with the then-winner Ecuador coming back to haunt the European Union. Ecuador, the world’s largest banana exporter, complained to the WTO against the EU’s single tariff of 176 Euro that came into force on January 1, 2006, terming it “high.”
Last year, while negotiating for a single tariff system to modify its complex web of duties and quotas for imports, the European Commission had suggested EU duties of 230 Euro and then scaling them down to 187 Euro, but WTO panels had rejected the proposals arguing that those were discriminatory against Latin American (Latam) nations. Out of that deadlock emerged the figure of 176 Euro, but the conflict simmered on.
Even after the introduction of the new EU single tariff system, there was widespread dissatisfaction, and Norwegian Foreign Minister Jonas Gahr Stoere got into the driver’s seat to find a political solution based on a thorough monitoring of the EU banana imports and various price systems in force.
But, after waiting nearly for a year, Ecuador decided to go ahead with the WTO route and on November 23, 2006 was joined by Colombia as a third party. Panama and the US followed and more countries are set to join in the fray according to sector insiders.
The EU’s current banana import policy significantly differentiates access treatment as a tariff-quota volume of 775,000 tonnes is exclusively reserved for bananas of ACP origin. ACP bananas within the quota enter duty-free (i.e., at a 176 Euro/tonne margin of preference), with unlimited ACP over-quota access authorised at a tariff of 176 Euro/tonne. On the other hand, an “autonomous” tariff of 176 Euro/tonne (a rate more than double the previously-applicable rate of 75 Euro/tonne) applies to all other bananas.
Bananas are the most important agricultural product in Ecuador, and its exports account for 25 percent of all Ecuador’s agricultural exports. Some 97 percent of all banana output is aimed for the European market. On the other hand, in Europe it is a “sensitive” commodity and there is a protection regime for the sector.
While bananas grown within the bloc account for only 16 percent of the total EU supply, production is important to the Spain’s Canary Islands, the French overseas departments of Martinique and Guadeloupe and Portugal’s Madeira and Azores islands.
Europeans eat some 4.6 million tonnes of bananas every year, making the bloc the world’s biggest banana market. Over two-thirds of the fruits consumed come from Latin America and a further 17 percent from Africa and Caribbean countries.
Written for New Europe, the European Weekly on June 16, 2007 - Issue : 734
Investigations take time and when it comes to investigating in environs full of banana peels, the going gets slippery, slowing down proceedings further. There was, however no slip last week on the part of Jonathan Todd, commission spokesman for competition commissioner Neelie Kroes as he told journalists, “Anti-trust inquiry is ongoing.”
Todd was replying to a question about the latest status of a “cartel probe” launched two years ago into a suspected cartel of banana wholesalers. In 2005, Kroes team had raided the offices of Europe’s largest fruit distributors after Chiquita, the world’s biggest producer of bananas blew the whistle on an alleged cartel in the European banana markets.
At the time, Fyffes of Ireland, Dole and Del Monte of the US had admitted that they had been among the targets of the raids while the European commission had confirmed the “unannounced inspections” at the premises of several producers and distributors of bananas and pineapples in Germany, Belgium, the United Kingdom and Ireland.
“The Commission has reason to believe that the companies concerned may have violated Article 81 of the EC Treaty, which prohibits price fixing and market sharing practices,” the commission statement had said clarifying that raids did not mean that the targeted companies are guilty adding that a full-scale inquiry would be carried out.
The investigation was launched at the instance of Chiquita, based in Cincinnati in the US when it had it had informed the EU competition authorities after the management became aware that several of its employees had been sharing price information with rival companies for “many years.”
Commenting on the inquiry, reliable sources in the European commission and European banana industry sector told New Europe that the regulators are targeting the five biggest banana companies – Chiquita, Del Monte and Dole of the United States, plus Noboa of Ecuador and Fyffes of Ireland for an illegal cartel activity.
The sources also confirmed recent media reports that at the end of two years the European commission has more concrete information and formal charges may be initiated before the end of the current year.
Although Commissioner Kroes has broken many records during her tenure for imposing fines on cartels, the market observers feel that the fines, if imposed may stay within the precedent cases of about 10 percent of annual sales. Moreover, it may take months before the case comes to an end as the accused firms would have several months time period to defend themselves.
One market pundit alleged that the timing is coinciding with the ongoing transatlantic banana war which got reignited last year when Ecuador was joined by the US, Columbia and Panama to open another tug-of-war a decade later.
December 15, 2006 saw the first day of the proceedings at Geneva of revival of the “1990s banana wars” with the then-winner Ecuador coming back to haunt the European Union. Ecuador, the world’s largest banana exporter, complained to the WTO against the EU’s single tariff of 176 Euro that came into force on January 1, 2006, terming it “high.”
Last year, while negotiating for a single tariff system to modify its complex web of duties and quotas for imports, the European Commission had suggested EU duties of 230 Euro and then scaling them down to 187 Euro, but WTO panels had rejected the proposals arguing that those were discriminatory against Latin American (Latam) nations. Out of that deadlock emerged the figure of 176 Euro, but the conflict simmered on.
Even after the introduction of the new EU single tariff system, there was widespread dissatisfaction, and Norwegian Foreign Minister Jonas Gahr Stoere got into the driver’s seat to find a political solution based on a thorough monitoring of the EU banana imports and various price systems in force.
But, after waiting nearly for a year, Ecuador decided to go ahead with the WTO route and on November 23, 2006 was joined by Colombia as a third party. Panama and the US followed and more countries are set to join in the fray according to sector insiders.
The EU’s current banana import policy significantly differentiates access treatment as a tariff-quota volume of 775,000 tonnes is exclusively reserved for bananas of ACP origin. ACP bananas within the quota enter duty-free (i.e., at a 176 Euro/tonne margin of preference), with unlimited ACP over-quota access authorised at a tariff of 176 Euro/tonne. On the other hand, an “autonomous” tariff of 176 Euro/tonne (a rate more than double the previously-applicable rate of 75 Euro/tonne) applies to all other bananas.
Bananas are the most important agricultural product in Ecuador, and its exports account for 25 percent of all Ecuador’s agricultural exports. Some 97 percent of all banana output is aimed for the European market. On the other hand, in Europe it is a “sensitive” commodity and there is a protection regime for the sector.
While bananas grown within the bloc account for only 16 percent of the total EU supply, production is important to the Spain’s Canary Islands, the French overseas departments of Martinique and Guadeloupe and Portugal’s Madeira and Azores islands.
Europeans eat some 4.6 million tonnes of bananas every year, making the bloc the world’s biggest banana market. Over two-thirds of the fruits consumed come from Latin America and a further 17 percent from Africa and Caribbean countries.
Written for New Europe, the European Weekly on June 16, 2007 - Issue : 734
Ryanair sues EU over French aid
Ryanair knocked on the gates of the European Court of First Instance with a legal case against the European Commission, accusing it of not preventing alleged illegal French state aid for Air France.
“Ryanair... today (Thursday, November 8, 2007), (exactly 18 months after its original complaint), lodged a case in the European Court of First Instance against the European Commission’s failure to act on Ryanair’s complaint about one billion Euro worth of State to Air France in the form of unlawful reduced domestic airport charges in France,” Ryanair said in a statement.
Confirming the legal action, Michele Cercone, spokesperson for the European Commissioner for transport, Jacques Barrot told New Europe, “The Commission is aware that Ryanair has launched an action under Article 232 for failure to act in connection will an allegation of state aid to Air France.” Ryanair added, “... (Ryanair) has called on the Commission several times to investigate this obvious abuse of EU competition rules, but the Commission has repeatedly failed to do so.”
Commenting on the subject, Cercone said, “The complaint is that by means of a differentiated system of airport charging in France where lower charges are imposed on operators flying routes inside France that the French authorities have favoured Air France.”
“While the Commission has not yet seen the content of the case lodged by Ryanair, it is confident that this action for failure to act will not be upheld. Ryanair’s complaint dates from May 8, 2006 (there was a supplementary submission on May 30, 2006).
“On receipt of the complaint the Commission services have taken action and have written to the French authorities to request information and clarifications on June 21, 2006, January 30, 2007, April 27, 2007 and June 28, 2007. Replies have been received on August 24, 2006, May 11, 2007 and August 29, 2007 and are being examined,” explained commission spokesman.
Announcing the launch of the latest proceedings Michael O’Leary, Ryanair’s CEO, said in a statement: “This is just another example of the Commission’s unevenhanded application of the State aid rules. They apply one rule to flag carriers by ignoring blatant State aid to Air France, Alitalia, Olympic, Lufthansa among others, while at the same time wasting time and money investigating baseless complaints from flag carrier airlines against open market commercial deals at regional and secondary airports.
“The French Government’s operation of massively discounted domestic airport fees in France – almost all of which supports Air France – amounts to approximately one billion Euro of illegal State aid to the benefit of Air France, yet the Commission has refused to do anything about this for the last 18 months! The Commission has previously outlawed differentiated domestic/intra EU airport charges in Finland, Portugal, the UK and Ireland, so why should France be any different?” asked Ryanair’s CEO.
Getting into the technicality of the subject, Cercone, the European Commission spokesman said, “In this connection it is the intention of the Commission services to examine this complaint both under the combined provisions of Article 49 of the Treaty and Article 3(1) of Council Regulation (EEC) No 2408/92 and under the State aid rules. To this end the Commission has on October 23, 2007 issued a letter of formal notice under Article 226 to France concerning discriminatory charges levied at French airports. “The Commission is also examining any possible advantage given in the context of State aid investigation into airport charging systems in airports in France and inquiries in relation to one such airport are already at an advanced stage,” Cercone added.
The Ryanair CEO in his statement called for fair competition saying, “It appears that the Commission applies different rules for the high fare flag carrier airlines compared to low fares airlines. We are calling on the Commission to start promoting competition and stop protecting flag carrier airlines who continue to receive unlawful State aid.”
Dublin-based Ryanair is currently involved in a number of separate legal challenges. It is challenging a European Commission decision to block its bid for fellow Irish airline Aer Lingus, and is fighting planned flight cuts at Rome’s Ciampino airport. Ryanair is also challenging the French government’s demand that the airline applies French working practices for its staff working in France.
“Ryanair... today (Thursday, November 8, 2007), (exactly 18 months after its original complaint), lodged a case in the European Court of First Instance against the European Commission’s failure to act on Ryanair’s complaint about one billion Euro worth of State to Air France in the form of unlawful reduced domestic airport charges in France,” Ryanair said in a statement.
Confirming the legal action, Michele Cercone, spokesperson for the European Commissioner for transport, Jacques Barrot told New Europe, “The Commission is aware that Ryanair has launched an action under Article 232 for failure to act in connection will an allegation of state aid to Air France.” Ryanair added, “... (Ryanair) has called on the Commission several times to investigate this obvious abuse of EU competition rules, but the Commission has repeatedly failed to do so.”
Commenting on the subject, Cercone said, “The complaint is that by means of a differentiated system of airport charging in France where lower charges are imposed on operators flying routes inside France that the French authorities have favoured Air France.”
“While the Commission has not yet seen the content of the case lodged by Ryanair, it is confident that this action for failure to act will not be upheld. Ryanair’s complaint dates from May 8, 2006 (there was a supplementary submission on May 30, 2006).
“On receipt of the complaint the Commission services have taken action and have written to the French authorities to request information and clarifications on June 21, 2006, January 30, 2007, April 27, 2007 and June 28, 2007. Replies have been received on August 24, 2006, May 11, 2007 and August 29, 2007 and are being examined,” explained commission spokesman.
Announcing the launch of the latest proceedings Michael O’Leary, Ryanair’s CEO, said in a statement: “This is just another example of the Commission’s unevenhanded application of the State aid rules. They apply one rule to flag carriers by ignoring blatant State aid to Air France, Alitalia, Olympic, Lufthansa among others, while at the same time wasting time and money investigating baseless complaints from flag carrier airlines against open market commercial deals at regional and secondary airports.
“The French Government’s operation of massively discounted domestic airport fees in France – almost all of which supports Air France – amounts to approximately one billion Euro of illegal State aid to the benefit of Air France, yet the Commission has refused to do anything about this for the last 18 months! The Commission has previously outlawed differentiated domestic/intra EU airport charges in Finland, Portugal, the UK and Ireland, so why should France be any different?” asked Ryanair’s CEO.
Getting into the technicality of the subject, Cercone, the European Commission spokesman said, “In this connection it is the intention of the Commission services to examine this complaint both under the combined provisions of Article 49 of the Treaty and Article 3(1) of Council Regulation (EEC) No 2408/92 and under the State aid rules. To this end the Commission has on October 23, 2007 issued a letter of formal notice under Article 226 to France concerning discriminatory charges levied at French airports. “The Commission is also examining any possible advantage given in the context of State aid investigation into airport charging systems in airports in France and inquiries in relation to one such airport are already at an advanced stage,” Cercone added.
The Ryanair CEO in his statement called for fair competition saying, “It appears that the Commission applies different rules for the high fare flag carrier airlines compared to low fares airlines. We are calling on the Commission to start promoting competition and stop protecting flag carrier airlines who continue to receive unlawful State aid.”
Dublin-based Ryanair is currently involved in a number of separate legal challenges. It is challenging a European Commission decision to block its bid for fellow Irish airline Aer Lingus, and is fighting planned flight cuts at Rome’s Ciampino airport. Ryanair is also challenging the French government’s demand that the airline applies French working practices for its staff working in France.
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