Examination of Witnesses (Questions 1-19)
MR WOLFGANG ELSNER
WEDNESDAY 24 APRIL 2002
1. Good afternoon, Mr Elsner, thank you for coming to see us. May I ask you to identify yourself for the tape?
(Mr Elsner) My name is Wolfgang Elsner. I am Head of the unit for ports and short-sea shipping at the European Commission in Brussels.
2. We are very grateful to you for your attendance this afternoon. Do you have anything you would like to say to the Committee?
(Mr Elsner) I am happy to answer any questions you may wish to ask me.
3. What is the current status of the draft Directive and when is there going to be an up-to-date text publicly available?
(Mr Elsner) The proposal for the Directive was made in February last year. It went to the first reading at the European Parliament, which took place in November last year, following which the Commission has submitted a modified proposal in February this year and that is the current state of play. I should add that the other legislative body, namely the Council of Member States, is currently debating the matter and the Spanish Presidency hopes to make substantial progress before the end of its Presidency at the end of June.
4. Am I to take it that it has gone through the European Parliament's committees?
(Mr Elsner) The European Parliament has voted in its first reading. There will be a second reading by the European Parliament but that will be subsequent to the common position to be adopted by the Member States, by the Council. The European Parliament as of today cannot do anything. It has to wait for the Member States to reach a common position and then the matter goes back to the European Parliament for a second reading.
5. Does the Commission understand the difference between European ports and the United Kingdom ports?
(Mr Elsner) The answer is yes.
6. In detail?
(Mr Elsner) In detail; yes, I believe so.
Mr Stevenson
7. The Commission say that the proposed Directive seeks to improve transparency but any attempt at clarification of the rules regarding state aid to ports would be a theoretical exercise and clarification should be achieved through case law. Is that statement correct? Why is that? If a Directive is accepted it becomes the responsibility of Member States to implement it? Does that clearly imply that the Commission has no faith whatsoever in the Member States implementing the Directive if it is accepted?
(Mr Elsner) These are two different things. The Directive has nothing to do with state aid. The Directive concerns the market access for service providers in European ports; that is not a matter of state aid. The state aid issue follows the rules which are already in place. The Treaty already has clauses on state aid and they are being applied on a case by case basis. These are two separate things.
8. Does not the proposed Directive seek to improve transparency in the public funding of ports?
(Mr Elsner) No. There are two issues of transparency. One issue of transparency is the flow of public funds into ports and within public ports. That is one issue which is currently addressed by what we technically call the Transparency Directive which is a piece of legislation already in existence which sets out quite clearly what the rules are. What we should like to introduce in this specific Directive is a very limited element of transparency, namely an element which obliges service providers especially, although not specifically, if they are publicly owned service providers, to ensure that they have transparent accounts for their services. If ever a question were to arise about a state aid element, then there would be easy access to the data.
9. Does the Commission accept that in continental Europe and certainly in the EU, ports do enjoy benefits of financial assistance from governments which is not available to ports in the UK?
(Mr Elsner) In Europe as a whole there are two fundamentally different philosophies about ports. The conventional philosophy, which used to be the conventional philosophy throughout Europe, was that ports are part of general infrastructure like roads and therefore it was the responsibility of the state to provide for this infrastructure. This philosophy has gradually been changed in a number of countries and you have today two groups of ports essentially. One group has to follow commercial considerations. The ports may be publicly owned, they may be privately owned, but they both have to follow commercial considerations. We have another group in many countries in Europe where this philosophy is not first and foremost the philosophy which has to be followed by politicians, by governments, by ports themselves. There has been a development over the last decade, certainly over recent years, which moves away very slowly from the idea that ports are only part of the general infrastructure but are businesses as such and of course this is the direction in which development in your country has gone for a long time already. Even in the group I have just mentioned, where ports will have to follow commercial considerations, there are differences again. Some ports are private, like a number of UK ports, other ports are not private, they are publicly owned, but they have to follow the same commercial considerations. If they need money for infrastructure, for development in ports, they have to go to the bank like everybody else has to go and again you have differences. Some, like UK ports, may make money from property development which other public ports in other European countries may not be allowed to do. You have a whole range of different situations and the question really is whether these ports are all acting on a level playing field.
Chairman
10. The question is: does the Commission think it can therefore produce a Directive which will fit neatly with all of these different ports, which you foresee having completely different structures, particularly since you do not seem to be able to consider the involvement of finance?
(Mr Elsner) No, the Directive deals with the right of a company, like me, if I am competent, to provide port services.
11. With respect, surely what it does is deal with competition within the port instead of between ports. Am I not correct?
(Mr Elsner) Roughly speaking yes, though legally we could argue about this.
12. Roughly speaking seems to be the way we are dealing with the whole of this. May I ask you therefore whether the Commission understands the difference between United Kingdom ports and ports on the continent of Europe?
(Mr Elsner) Yes; yes; yes.
13. It does understand.
(Mr Elsner) Yes.
14. And it still persists in thinking that it can produce a Directive which will fit all of the ports.
(Mr Elsner) Yes, that is right.
Mr Stevenson
15. I am still not clear. There is a clear distinction between ports in the UK and many if not all ports on continental Europe in the EU in that in the UK no financial assistance is given by the Government of any sort and in continental Europe it is the general rule—
(Mr Elsner) No, it is not.
16. It is not the general rule?
(Mr Elsner) No.
17. Would you like to clarify that?
(Mr Elsner) It is not the general rule. I have talked about two different groups of ports. If I put nameplates now to them, I can make it clearer. We have those ports in Europe which have to follow commercial rules, they are acting as commercial enterprises; whether they are publicly owned or privately owned does not make any difference, they still have to act as commercial enterprises. That is the case in Spain, it is the case in the Scandinavian countries, all three of them, it is the case in Ireland, it is the case in Portugal and it is being introduced in Greece now, although the process is still far from being completed, and the UK. Then you have a situation where ports are considered to be part of general infrastructure and the political philosophy for those ports is a completely different one. That is the case in Italy, in France, in Germany, to some extent in Belgium and in Holland, although there again you have a different approach, because even when it comes to those publicly financed ports you have a distinction between ports which have to make profitability assessments before they are allowed to make investments and draw on public funds for these investments and other ports which do not have to make such profitability assessments. If you wanted to create a completely level playing field, you would either have to tell one group that their system, which has been the backbone of their national policy, is no good and should be replaced by the system of the other group or the other way round. So you have group one, UK, Ireland, Scandinavian countries and Spain and you have the other group consisting of Belgium, France, Germany, Italy and the Netherlands.
Chairman
18. It is very difficult to produce some kind of template which would fit them both.
(Mr Elsner) That is right, but you cannot fit them both.
19. No, so why are you trying?
(Mr Elsner) We are not trying that because what we are doing is something different. This Ports Services Directive is only about individual companies, port service companies, cargo handling companies, which are capable of doing a specific job, namely cargo handling. In many ports today, in many countries of Europe, such companies, even if they are competent, are not allowed to operate in the ports. It is purely a market access exercise.
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