Download Antifragile in the EU

Antifragile in the EU
Romania`s experience as a member state from the
competition policy`s perspective
Paul Prisecaru, PhD
Chief Economist
Romanian Competition Council
Competition policy: from fragility to robustness via antifragility
Is the EU a fragile construction?
„Thankfully, the European Union is legally protected from
overcentralization thanks to the principle of subsidiarity: things should
be handled by the smallest possible unit that can manage them with
efficacy. The idea was inherited from the Catholic Church:
philosophically, a unit doesn’t need to be very large (the state) nor very
small (the individual), but somewhere in between. This is a powerful
philosophical statement, particularly in light of both the transfers of
fragility and the notion that size fragilizes.”
Nassim Nicholas Taleb - Antifragile
700
8
650
6
BILLION RON
600
4
550
2
500
0
450
-2
400
350
-4
300
-6
Economic cycle (right axis)
GDP (left axis)
Potential GDP (left axis)
GAP BETWEEN ACTUAL AND POTENTIAL GROSS
DOMESTIC PRODUCT (PERCENTAGE DIFFERENCE)
Romania`s business cycles since 1995
Romania`s convergence: GDP, productivity and prices
EU28 = 100
70
60
59.4
57
50
49
40
30
20
10
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Labour productivity per person employed
Price convergence
GDP per capita
Romania`s inflation rate 1997-2016
Concentration (average HHI) across sectors
1994 vs. 2014
80
70
60
50
40
30
20
10
0
1994
2014
Agriculture
1994
2014
Mining and
quarrying
1994
2014
Manufacturing
1994
2014
Utilities
1994
2014
Constructions
1994
2014
Commerce
1994
2014
Services
1994
2014
Real estate
National Bank of Romania – Study on the structure of the Romanian economy (2016)
How competition policy influences macroeconomic outcomes
European Commission - EU competition policy in action
Competition policy`s impact is significant in the long run
„Distributional Macroeconomic Effects of EU Competition Policy: A General Equilibrium Analysis” by European Commission staff
The new proposal for a Directive to empower the competition authorities of the
Member States to be more effective enforcers and to ensure the proper
functioning of the internal market
Problems identified by the European Commission
RCC`s status
Independence, human and financial resources
YES
Investigative powers backed by effective sanctions
YES
Effective fines for breaches of EU competition law *
differences in fines across MS
YES
Divergences in leniency programmes across Europe
-
Gaps and limitations in NCAs’ tools and guarantees
-
„...even a relatively small increase in the effectiveness of competition policy
enforcement would give a significant boost to productivity. In fact, as shown in Graph
1 below, over the last decade TFP growth has had an impact on total GDP as
important as increases in labour and capital, and it has become the most important
factor during the last five years.”
Impact asessment for the Directive
Public perception about competition policy is good in Romania
Flash Eurobarometer 403 – Citizens’ Perception about Competition Policy (2014)
Lessons learned
• Competition is a key driver of development – should be obvious, but the
fight is never over!
• Being „antifragile” means:
Adapting to context;
Learning from mistakes;
Constantly trying to improve your game;
Investing in processes.
• EU membership status is a key asset for an NCA`s antifragility
• Leverage enforcement successes for a greater impact: advocacy
• A rational state aid policy is better for public finances (you don`t have to
win all the battles in order to win the war)
Miodrag Belodedici (left)
- First player in history to win the European
Champions Cup with two different teams
(Steaua Bucharest & Crvena Zvezda
Belgrade)
- Only player in history to win the trophy with
two teams from Eastern Europe
- Ran from communist Romania to Yugoslavia
in 1988
- World Cup quarter final with Romania`s
national team in 1994 (unfortunately he
missed a penalty and we lost to Sweden)
Being an NCA in the EU is like being a great football player that is drafted for the national team: you have to be able to
play for the national markets as well as for the Single Market!
Xвала
Mulţumesc
Thank you
Email: [email protected]
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