View from City Road: Free trade in Europe set back years

Bring back Sir Leon Brittan, all is forgiven. Since he left his job as Competition Commissioner for the more sedate pastures of trade, the cause of liberalisation, deregulation and free trade in Europe seems to have been set back years. Judging by the ludicrously large package of state aid the EU waved through for Air France yesterday, we have now reached a phase in the affairs of the EU where almost anything goes. By all accounts Sir Leon opposed it, but he was virtually a lone voice.

The Air France decision comes on top of a host of other deeply worrying reversals in the cause of free competition, including recent moves to allow huge quantities of aid to ailing state- owned steel industries and the vote by MEPs to trample roughshod over moves to free up European telecommunications. Only a fool would see this as anything other than a trend.

The package of conditions attached to the Air France aid were so feeble as to be almost laughable. Even the French Transport Minister, Bernard Bosson, was able to pronounce himself fully satisfied with the package, which, as any good union negotiator will tell you, must have meant the management was a pushover.

It is a little-known fact that one of Jacque Delors' parting acts as president of the EC was to dismantle the telecommunications division of DG4 - the competition directorate. The unit had been mainly working on how to regulate telecommunications in a liberalised market. If Sir Leon doesn't watch it, he'll find much of the progress he made while at DG4 reversed.

Diehard believers in the workings of the EU continue to insist that, although what has occurred is undoubtedly a setback, the cause of liberalisation and deregulation is now so far advanced as to be virtually unstoppable. Telecommunications liberalisation will be painful and difficult, but it will happen nevertheless. Let's hope so. The omens are not good.