Tuesday, 23 November 2010

Now State Aid for the Germans!

Today in Strasbourg, the European Parliament gave it's assent to an extension of the derogation from Article 182 (4) of the Single CMO Regulation, under which Germany may provide state aid to the German Alcohol Monopoly. This derogation was due to expire on December 1st 2010, but it now appears likely that it will be extended until January 1st 2018.

The concepts of monopolies and state aid are anathema to a competitive free-market economy, which is what the EU aspires to be.

The much needed and long-awaited reform of the Common Agricultural Policy (CAP) in 2013 will now be undermined by the continuation of this derogation. Much of the 110 million euros in subsidy per annum goes directly to farmers, and there is a danger that the extension of the derogation may set a new precedent in the EU, where farmers now often concentrate on chasing subsidies rather than on following the market.

The West Midlands has seen too many well established businesses relocate to other EU countries as a result of financial incentives provided by the European Commission. We have a tradition of brewing and distilling - will we now see those industries threatened by state subsidised continental monopolies?

Mike Nattrass and I voted against this derogation - sadly too many other British MEPs approved it