Tenth Report on Competition Policy (published in conjunction with the 'Fourteenth General Report on the Activities of the Communities in 1980')

Abstract

The far-readling and recurrent consequences of the oil crisis, the upsurge in trade following the acceleration in the dismantling of tariff and non-tariff barriers in international trade and the relatively rapid development· of new competitive capacity in the Third World, notably the Far East, have hastened the international division of labour and shown up certain defects in the economic fabric of the Community. It is ~aving to face up not only to a series of structural problems, but also to the need to maintain its still substantial competitiveness, and to take up the challenge presented by the outside world. It is also having to deal with some of its own market operators who are pressing for the retention of traditional structures, an unrealistic improvement of living standards· and reliance on State financial intervention and protectionist measures. This is the climate in which European competition policy has to be determined. Opening up to the world market, even in time.of crisis, is fundamental to the sound development of our economy and will ensure maintenance of adequate competitive capacity. Generally speaking, the economic crisis has had least effect in industries where there is. effective comp.etition. However, there is no excuse for confusing political constraints with the tenets of free competition, which rule out all restrictions on firms' freedom. Although the Community economy must be placed fairlyand squarely on the road to efficiency, fruitful cooperation by means of joint endeavour must be encouraged; particularly in innovative sectors; Community industry must be protected against competitive conduct incompatible with international trade law. The pouring of oil on waters troubled by intolerable social tensions is. also part of a healthy competition policy. And this kind of competition policy cannot succeed without a stamp of approval from the social and political forces. . In current circumstances in particular,the Commission's competition policy not only has to sustain effective competition; it has to support an industrial policy which promotes the necessary restructuring