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New take on competition policy has to reflect key role of cities and regions in green and digital transformation  

The members of the European Committee of the Regions (CoR) discussed the European Commission's annual Competition Policy Report during their December plenary session in Brussels. The opinion drafted by Dominique Lévêque (FR/PES) calls for future legislation to account for the more complex state activity needed to unlock regions' full economic potential in the green and digital transformation.

Resting on the pillars of state aid control and antitrust policy, the EU's competition policy seeks to safeguard the single market from disproportionate state interference and abuse of market power by large corporations. It aims to achieve a single market working to the benefit of EU citizens and consumers alike. The CoR opinion adopted during the plenary session acknowledges the importance of a sound competition policy, while at the same time stressing that competition as such should not be seen as an end in itself but rather as a means to achieving overarching political objectives.

"The provision of public goods, infrastructure and investment has always been a distinctive feature of the European social model and will continue to play a pivotal role in the green and digital transition we face," said rapporteur Dominique Lévêque (FR/PES), Mayor of Aÿ-en-Champagne. "The main question from the perspective of the regions, therefore, is how to reconcile stringent competition policy with the need for public investment in the framework of the European Green Deal and the Digital Single Market aspirations. Any new regulatory environment has to respond to the different geographic and social requirements in the regions and eventually strike a good balance between the objectives of competition and cohesion."

Overall, the CoR welcomed the Commission's latest Report on Competition Policy, which indicated among other things that the Commission had relaxed its strict assessment of whether public services and investments at local level affect trade between countries. A prime example of this modernisation of state aid rules are the recently implemented Broadband Guidelines, which give local and regional public authorities more leeway to address social and economic challenges linked to the transition to a digital economy. "Given the difficulties that policymakers in rural areas face in bridging the digital divide with urban areas via investment in broadband infrastructure, this reform is a step in the right direction," said Dominique Lévêque.

With regard to the forthcoming revision of the guidelines on state aid for environmental protection and energy transition, CoR members called for any new regulatory framework channelling investments towards renewables and energy efficiency to incorporate equally ambitious measures securing affordable and reliable energy supply. In addition, members urged the Commission to investigate whether the kerosene tax exemption amounted to a distortion of competition benefitting the aviation sector, and – in view of past cases of Member States granting unfair advantages to domestic carriers by adjusting national taxation schemes – suggested coordinating potential taxation at European level.

Finally, the CoR pointed out the structural nature of the housing crisis affecting urban areas across Europe, in particular the fact that housing markets increasingly fail to meet the demands of citizens with average incomes. The CoR therefore urged the Commission to clarify EU regulation of social housing and make it clear, simple and transparent. Owing to the diversity of European housing systems and the broad range of local property market constellations, revised regulations should strictly conform to the principle of subsidiarity and maintain Member States' room for manoeuvre in defining social housing access criteria and implementing specific measures.

Members closed the discussion by encouraging the rapporteur of the European Parliament, Mme Stephanie Yon-Courtin (FR/Renew) to continue to advocate for the CoR's positions on competition policy in subsequent parliamentary debates.

Contact:

Carmen Schmidle Maximilian v. Klenze

Tel. +32 (0)494 735787 +32 (0)2 282 2523

Carmen.Schmidle@cor.europa.eu Maximilian.vonKlenze@cor.europa.eu