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Why Shoot Down Ryanair?

Competition policy is the European Union's biggest success. The reason is simple: decisions in this area have been removed from the jurisdiction of individual nations, thus making them more difficult to influence. The result is that the many lobbies that oppose increased competition, or fight to protect state aid, have been hugely weakened. But has the anti-trust fight gone too far?

The executive powers that the European Commission enjoys over competition policy allow it to circumvent the national vetoes and compromises that are common in other areas. For example, implementation of rules governing the single market are subject to a unanimity rule, or at the very least a qualified majority of member states, with the result that progress is usually slow.

The European Commission recently lost much of its standing in the eyes of ordinary Europeans with the vitriolic fights between the Council and the Commission over the defunct Stability Pact and the failure to approve the draft constitution. So it is vital that the Commission's reputation in the area of competition policy shine because this reputation is the Union's most precious capital; this is no time to waste it.

However, excessive zeal and pursuit of cases with dubious economic justification, as has sometimes happened in merger cases, can do serious damage. Those who argue for the protection of state aid, for instance, immediately use an unfortunate decision in the merger area: see, they say, how stupid the Commission is at economics! Examples of this include the decisions to veto the merger between Airtours and First Choice, and also between Tetra Laval and Sidel - decisions that where based on dubious arguments and were eventually reversed by the European Court of Justice, with serious damage to the Commission's credibility.