Europe's trade commissioner will attack France's government on its own doorstep on Saturday with a ringing defence of the free market.
Peter Mandelson will tell the Paris Chamber of Commerce and Industry that competition is not a "dirty word" in a line-by-line rebuttal of the views of Nicolas Sarkozy, French president.
"Competition as an ideology, a dogma, what has it done for Europe?" Mr Sarkozy asked last week, after securing the removal of a key commitment to "free and undistorted competition" from the European Union's reform treaty.
Mr Mandelson's answer is precise: "Competition should indeed not be some sort of dogma or religion. But nor is it a dirty word," he will say. "Competition has helped make Europe rich and France one of the most productive economies in Europe. Competition is how we keep our markets efficient and dynamic; keep prices low for consumers and maintain innovation. Competition is a source of creativity. Without it, our economies would stagnate."
The former British trade secretary will also rebuff Mr Sarkozy's claim that trade "reciprocity" required greater EU protectionism. He would defend European companies from unfair competition, he said, but: "The response to a fortress Europe is a fortress US, or a fortress China and India. We need reciprocal openness, not reciprocal barriers."
Mr Mandelson will say the French government is using tough rhetoric to disguise its domestic reform agenda and the tactic could backfire. "As we reform at home, let's recognise it is not sustainable to blame outsiders – 'Brussels' – for forcing reform on unwilling governments. Reform is justified on its own merits. It is equally not sustainable to pursue ambitious reform at home while arguing for protection from fair competition abroad – as if being tough with foreigners provides cover for change at home."
He said that the EU was the perfect tool to manage globalisation, which "cannot be left to look after itself". But we can neither "retreat nor hide" from the phenomenon, "as I believe the new French government recognises". Mr Sarkozy, who has already called for Mr Mandelson to be demoted, may treat his remarks as a declaration of war rather than a wake-up call, raising tensions between Paris and Brussels still further.
Copyright 2007 Financial Times
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