Europe’s baleful bail-outs

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: Kroes.

Even before the crisis, several governments chafed against EU competition rules. In 2007 Mr Sarkozy had a reference to “free and undistorted competition” deleted from the EU’s proposed new rule book, the Lisbon treaty, to appease French voters who think the EU is too market-orientated. In French political rhetoric, competition is a harsh doctrine whose opposite is solidarité.

Critics are not likely to be won over, in the depths of a crash, with economic arguments about the efficiency of markets. So here is a political argument: the opposite of competition is not solidarity, but monopolies and the maintenance of privilege. Politicians present themselves as disinterested guardians of the public good, tempering the power of the greedy, reckless capitalist elite. But in truth, too much state spending involves taking money from the many, who pay taxes and consume goods, and handing it to the few: ex-state monopolies, special interests, regional favourites or incumbents. As a rule of thumb, politicians will rarely challenge interests that feature in children’s books: such as farmers, fishermen, firemen and those that build exciting things. Mr Sarkozy told the European Parliament recently that EU leaders had a duty to ensure Europe could “continue to build aeroplanes, boats, trains and cars”.

EU regulations are pretty good at rooting out the worst forms of pork-barrel spending (better, in many cases, than the equivalent rules in America). Competition officials in Brussels have long been pursuing two loss-making airlines, Alitalia and Olympic, over illegal subsidies. Both are tragedies born of patronage on an epic scale. For years, decisions about hubs and route maps have been dictated by politicians and trade unions trying to preserve local fiefs. Their payrolls have been bloated by the appointment of mistresses of the powerful, their in-laws and idiot nephews.

Privatisation and restructuring now await these flag-carriers. A similar fate is being pushed by Brussels on a set of Polish shipyards, which lose money on every ship they build (even during the recent shipping boom). Polish taxpayers could have several new schools and hospitals for the funds given to the shipyards over the years. But these are the birthplace of the anti-Communist Solidarity trade union, and Polish politicians are scared to challenge it.

Please restrain me