Slipping through the net: How EU countries evade new budget-transparency rules

Some European Union countries are failing to provide clear information to citizens on fisheries subsidies, according to a report by Fishsubsidy.org. Under the European Transparency Initiative, EU member states are obligated to publish data on the recipients on fisheries subsidies on dedicated websites, including the names of beneficiaries and the amounts of public funding allocated. However, in a number of cases the data being provided are far from user-friendly.  “The publication of names of beneficiaries represents real progress in budget transparency but this has been accompanied by a reduction in the quality and detail of data and its fragmentation into dozens of often inaccessible sources. With the responsibility for publication of data—including the choice of data format—left to member states, European citizens are cast into a maze of different languages, formats, places and modes of publication,” said the author of the report, Brigitte Alfter.  Fishsubsidy.org is a project coordinated by EU Transparency, a non-profit organisation in the UK and the Pew Charitable Trusts, a charitable foundation based in the United States, which seeks to obtain detailed data relating to payments and recipients of fisheries subsidies in Europe and make these data available in a way that is useful to European citizens.

For more information, see www.fishsubsidy.org

Responding to the Economic Crisis - Fostering Industrial Restructuring and Renewal

A recent report by the OECD examines the impact of the global economic downturn on the long-term competitiveness of the automotive and construction sectors and explores how governments can support restructuring.  Both the automotive and construction sectors have experienced a particularly steep decline in demand in the wake of the economic crisis.  The responding measures by governments, however, may not benefit these industries in the long term. “Introducing or increasing government support measures to producers in difficulty will do little to encourage the industry restructuring and renewal that is needed to move towards more viable and sustainable business models.  It will also not help address existing overcapacity in the industry,” warns the OECD.  But the OECD offers that the crisis provides opportunities for restructuring which will lead to more sustainable construction and automotive industries, through policies that foster entrepreneurship, training, and investments in research and development.

The report, “Responding to the Economic Crisis - Fostering Industrial Restructuring and Renewal”, is available from the website of the OECD:http://www.oecd.org/document/26/0,3343,en_2649_34173_43387482_1_1_1_1,00.html

The Questionable Case for Subsidies Regulation: A Comparative Perspective

A paper by Alan O. Sykes, a professor at Stanford University, argues that the regimes governing subsidies under United States, European and WTO law rely on arbitrary guidelines that fail to identify market-distorting subsidies accurately.  Moreover, Professor Sykes suggests that the problem is largely intractable. “Due to the complexity of the modern economy and the wide panoply of government activity that both encourages and discourages the activities of business enterprise, it is arguably impossible to fashion general principles for the identification, let along measurement, of undesirable subsidies,” he writes.  In light of the challenges in effectively disciplining subsidies, Professor Sykes suggests that the more laissez-faire approach in the U.S. may be preferable to the more restrictive approach taken to state aid in Europe. He also proposes that an approach focused on preventing changes in government policy that undermine negotiated market access agreements would be preferable to the current WTO system.  Such an approach “avoids many of the conceptual problems associated with efforts to define subsidies in the abstract by offering a natural baseline against which to measure the existence and magnitude of policies that become problematic.”

The paper, “The Questionable Case for Subsidies Regulation: A Comparative Perspective”, is available from the SSRN: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1444605