Commissioner for Competition Margrethe Vestager: Money the State invests in a company may not be lost

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06.09.2018.

Francois Lenoir / REUTERS

Povjerenica Europske komisije za tržišno natjecanje Margrethe Vestager

The Commissioner's visit is a hot topic in Croatia, as the future of ailing Croatian shipyards rests in no small part on her future decisions

Danish Commissioner is coming to Zagreb on Friday and will meet with Croatian Prime Minister. Even though she is not coming because of Uljanik, it will be the main topic. Even though President of the European Commission (EC) is formally the most powerful person in the institution, the epithet is always applied to the Commissioner for Competition.

She has the power to punish the untouchables such as large international companies, oppose powerful lobbies and impose fines worth billions on those who violate strict market competition rules. The epithet is currently applied to Commissioner Margrethe Vestager, the liberal politician from Denmark who is uncompromisingly continuing what is called “protection of citizens’ interests” and the fight for equality of all in the market, including the big and the small. She is coming to Zagreb on Friday to meet with Prime Minister Andrej Plenković and ministers. She assured us in an exclusive interview with JUTARNJI LIST before the visit that it is not directly connected to the crisis in Uljanik shipyard, but was planned before the crisis broke out.

What is the main reason for your visit to Zagreb?

- The main reason for the visit is not connected to any specific case. It is important for me to meet with Croatian officials and talk to them in a national setting. I frequently hold meetings with them in Brussels, but I think it is important to meet them in their countries and cities. That makes it easier to understand their position.

Many are connecting the visit with the current crisis in Uljanik shipyard in Pula. Is your visit connected to the crisis?

- No, it is not, the visit was planned a long time ago.

Be as it may, the question will be raised as the crisis is one of the most important issues for the public and the Government sent you the restructuring plan for analysis. What will the EC say and is there a chance to save the shipyard?

- Of course, it makes sense that the issue is talked about as it is a very important one. The issue is very important to many families as well as business interests. However, we still have not completed analysis of restructuring plans. It is very important for me to hear the Government’s take on the situation and ideas of how it will develop. When the State provides support to a company, it is necessary to make sure that restructuring will secure sustainability. If the company’s business is not sustainable, there is a risk that taxpayers will lose money. For us, State subsidies must secure sustainability of business

Workers were on strike and the Government secured two months worth of wages. The Government says that it is in contact with the EC. Did the EC approve one-off support and can this practice continue until you decide on the restructuring plan?

- We will consider this question. We saw that workers received two wages which were some two months late. Everyone understands the problems their families are facing. We will consider the guarantee, I believe it is worth some EUR 15 million, as part of State subsidies and the restructuring process. We do not have specific conclusions on recent events and are looking at it as one case. We understand that market competition rules are strict, but on the other hand, we are talking about the fates of workers, their families and importance of the case for the region, tradition and more.

How flexible can the EC be in cases like this one?

- It is important, of course, that citizens from cities or regions, wherever shipyards are important, feel like rules are the same for everyone. Otherwise some other part of Europe could ask why rules were bent for them, but not for us. That is the most important issue, of course. Everyone should be treated equally. Bearing this in mind, we also want to make sure that such support, when a company is in need of State support, results in restructuring of the company and making its business sustainable. So, if the State invests money in a company, that money may not be lost. It has to contribute to making the company sustainable. Unfortunately, in the case of Uljanik, there is nothing new as the company’s problems have been present for years.

We know that you do not set deadlines in such cases, but considering developments and sensitivity of the issue, when could we expect your comment on the restructuring proposal?

- It is very difficult to make an accurate prediction. We will prioritize the case, for obvious reasons, because it is urgent and important, but I cannot make an accurate prediction on when the analysis will be completed.

Besides this case, are you happy with Croatia as far as abiding by market competition rules goes and work of national bodies in charge of competition?

- It is very important for national bodies tasked with protection of market competition to be independent, have enough resources at their disposal, secure protection of consumer interests and make sure that they feel the benefits of competition. Of course, that is not easy as it sometimes requires making moves unpopular with the Government and other sides. However, everyone must operate in line with regulations recently adopted in the EP and European Council, including more authority for national competition protection bodies. As far as cooperation with the Government goes, Croatia has been a member of the EU for five years and I believe that the Government’s implementation of EU regulations is impressive. Of course, we put a lot of effort into aid and explaining the details about State support, but I believe the Government worked hard to make sure things went as smoothly as they did.

Our international neighborhood is interesting, with the future of the EU discussed. The EC is in the last years of its term. How do you see the future of the EU?

- I see it as promising. We have to regain confidence that we can change things for the better. I believe that saying we live in interesting times is an understatement. We have many tasks ahead of us, from climate change to illegal migration, cybernetic security and more. Of course, the technological evolution and creation of new jobs are of paramount importance. When we take a look at what we have accomplished over the last 70 years, it is impressive.

Is this in jeopardy now that we see schism, growth of populism and support for extremism in places, societies and countries where they were not present, societies that were rather liberal until recently?

- Yes, I believe it would be dangerous if we started a dark and gloomy analytical discussion rather than uniting and finding a way to solve problems. We should move from discussion to action so that people can see proof what we can do for them and how we can change things. I believe it is very important to secure our external borders. Without secure external borders we cannot have open internal borders.

Will the EU look differently after Brexit and will companies from UK have to abide by EU rules if they want to trade with the EU after Brexit?

- Of course the EU will look differently, and not just because it will have 27 instead of 28 member states. For me this is painful as the UK was part of the EU for 43 years. As far as rules go, of course, our ambition is to make the UK have the same competition rules when it comes to State support even though negotiations are not completed. For instance, it will be difficult to prevent State support for automobile makers in the EU if their counterparts in the UK receive State support.

European elections are approaching and there are rumors about names of potential lead candidates. Your name came up in this context. Are you prepared for this?

- Personally, I have a problem with lead candidates for two reasons. The first is the principle itself as European democracy has two sources of legitimacy – one is the EP with directly elected deputies and member states. The two operate in conjunction and the EP should not be allowed to impose candidates on the EC, and the same goes for the other way around. They have to decide together. The other is that the principle excludes many who cannot be lead candidates as, for instance, prime ministers cannot resign to run as lead candidates. That is not realistic. This limits the number of potential number of candidates for very important positions. This is why I am very skeptical towards the idea and it would be strange for me to say I would like to be such a candidate.

There will surely be discussion at the Council and President of France Emmanuel Macron mentioned you as a candidate?

-Yes, but we should be very careful about believing everything we hear. I said that I would be more than happy if my country entrusts me with another term at the EC as Commissioner for Competition. I believe there is more to be done and several important cases are ongoing, but the cases are waiting for the start of the new Commission’s term. It is important to be there when rulings are made.

It is important that all parts of cities or regions, wherever shipyards are important, feel like rules are the same for everyone. If that is not the case, some other part of Europe could ask why rules were bent for them, but not for us.

Croatia has been member of the EU for five years and I believe the Government’s implementation of EU regulations is impressive. Of course, we put a lot of effort into aid and explaining details about State support.

Competition must bring benefits to the market

You are at the center of media and public attention because you have important authority. How difficult is it for you to deal with cases against large global companies and punish them?

- It is difficult because processes take a lot of time for justified reasons. Rule of law includes fair trials and gathering of evidence with the aim of avoiding the possibility of punishing the wrongly accused. Personally, I see the fact that processes are lengthy as pressure because markets are fast-paced and we work a lot of time on one case. This asymmetry, which is true for anyone imposing regulations, is what bothers us.

For instance, it takes minutes to break into someone’s house, but it takes weeks for the police to investigate the burglary, catch the people responsible for it and bring them before courts. The asymmetry exists in all imposing of regulations, but it comes with great pressure in our case because it is our duty to make sure that European have benefit from market competition – wider offer, better quality, lower prices and new products. That is why I want to perform my job as best and fastest as possible.