The Economic Principles of European Integration

By Stephen Frank Overturf | Go to book overview

CHAPTER 6
Industrial Policy

The original intent behind industrial policy in the EC was to avoid any threats to integration through cartelization or lack of competition within the Community. This would easily occur, even if trade was nominally free due to the relaxation of tariff barriers, if markets were artificially divided up through cartelization, or if prices were to differ due to price discrimination policies by monopolies or near-monopolies. In addition, the barriers to entry characteristic of monopoly or oligopoly could divert resources away from their most efficient use.

The Treaty of Rome addressed these issues in Articles 85 and 86 (see Appendix). Article 85 declared that various collusive practices were to be null and void, and henceforth not enforceable in the courts. This last point may strike those familiar with U.S. antitrust law and history as somewhat curious, but it is a fact that Europe has generally not only not shared such a history, but that practices that would call for heavy fines and even jail sentences in the United States are enforceable by the law of contracts in Europe. Article 86 added industrial concentration as an area of concern by prohibiting, if not the dominant position of firms, then at least the abuse of that dominant position.


COMMISSION POWERS

In the cases of both industrial collusion and concentration, however, there is something of a dichotomy in Community intent, which shows up in policy itself and in the powers of the Commission to enforce policy.

Regarding collusion, for example, it is felt that such structures can actually be efficient if they enhance distribution or purchasing

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The Economic Principles of European Integration
Table of contents

Table of contents

  • Title Page iii
  • Contents vii
  • Preface xi
  • Acknowledgments xiii
  • Chapter 1 History of European Economic Integration 1
  • Chapter 2 Community Institutions 15
  • Chapter3 Customs Union Theory 21
  • Chapter 4 Factor Mobility and Tax Harmonization 35
  • Chapter 5 Monetary Union 46
  • Conclusion 59
  • Chapter 6 Industrial Policy 61
  • Chapter 7 Common Agricultural Policy 75
  • Conclusion 87
  • Chapter 8 Trade Relations: Developing Countries 89
  • Conclusion 101
  • Chapter 9 Trade Relations: More Developed Countries 102
  • Chapter 10 Regional Policy 118
  • Chapter 11 Social Policy 134
  • Conclusion 144
  • Appendix Treaty Establishing the European Economic Community 147
  • Bibliography 167
  • Index 169
  • About the Author 173
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