Travelling Fast to Get Nowhere: Transport Policy in the European Union

Politics (1994) 14(2) pp. 67-73

Travelling Fast to Get Nowhere:- Transport Policy in the European Union Susan Baker

The Common Transport Policy of the EU is one of the three common policies mentioned in the Treaty of Rome. However, this policy area bas seen few achievements It was not until the 1980’s that any real attempt to develop a CTP began. 713e drive to complete the internal market has given .&is tusk a new urgency. However, the legacy of its past approach makes it di@cult for the EU now to develop a successful transport policy. Va ying eqbhnations exist f i r rhis failing. Further- more, the EU has failed to take account of the wider significance of transport policy, especially for regional development and for the environment.

Introduction The study of European Union (EU) transport policy is important as it can reveal much about divergent practices within member- states concerning state intervention in the economy, including the extent of state regulation, monopolies, subsidies as well as funding for infrastructure development projects Fur- thermore, member-states have traditionally used transport policy as an instrument of social and distributional policy. This policy is

also tied up with other policy areas, including tourism, environmental protection, land-use planning as well as general economic development strategies. From the study of thls policy area we can learn much not only about government practice within member-states but also the difticulties the EU encounters in trying to develop Union policy in the face of diverse practices across its member-states.

The Common Transport Policy (CTP) of the EU is one of the three common policies mentioned in Article 3 of the Treaty of Rome (the others being external commerce and agriculture). Transport has thus a special status as one of the foundation policies of the Union, At the time it was seen as both a means of achieving European integration and of accelerating economic development (Whitelegg, 1988, p.6). However, this policy area has seen few actual achievements. For a long time the EU seemed content with ody marginal, mostly regulatory, inputs and transport policy largely remained within the hands of national governments each with its M e r - ent, often protectionist, practices. It was not until the second half of the 1980’s that any real attempt to develop a CTP began. The drive to complete the internal market has given a new urgency to this task. However,

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Susan Baker, Erasmus Umversity, Rotterdam

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Transport Pdlcy in the European Union 0 Susan Baker Politics (1994) 14f21 pp. 67-73

the legacy of its past approach makes it difficult for the EU now to develop a successful transport policy.

Legal basis of action A number of articles in the Treaty of Rome are of special significance for the development of transport policy. Article 3 states that the ‘activities of the Community shall include ... the adoption of a common policy in the sphere of transport’. Title IV of Part Two of the Treaty devotes 11 articles (74 to 84) to transport (Hamilton, 1990, p.14). Under these there is an obligation on the Council of Min- isters to lay down common rules for transport among EU member-states and speclfy the conditions under which non-resident car- riers may operate transport services within another member-sate, known as cu6otuge. This was subsequently to prove important. In 1983 the Parliament took the Council to the European Court of Justice for its failure to take the action required under the Treaty. The Court ruled against the Council, obliging it to begin in earnest the development of a CTP. While this ruling was important in goad- ing the Council into action, nevertheless criti- cisms of the Council’s subsequent achievements remain (Lodge, 1989, p.90).

Policy to date The development of EU transport policy has been primarily incrementahst, addressing problems in a piecemeal manner and seeking ad hoc solutions to them. There has been little, if any, strategic planning, especially in relation to co-ordinating different transport modes, such as road, rail, air, and maritime transport. Furthermore, transport’s relation- ship to wider economic, regional, environmental and social policy areas has been largely ignored. Instead, the EU has con- centrated on negative integration measures, such as the removal of competition barriers

and fiscal, social and technical harmonisation. Furthermore, the budget allocated to transport policy remains limited, although the Union has sponsored major projects such as The Channel Tunnel and Alpine crossings. Lodge has argued that the problems asso- ciated with the fdure to develop an adequate CTP will only intensify with the completion of the single market (Lodge, 1989, p.91).

Developments in the Union’s CTP can be divided into a number of distinct phases.

1. The creation of a Common Market 1958 - 1972

During h s phase the main concern was with the elimination of barriers to effective competition and establishing common regulations, particularly for inland transport. According to Whitelegg this early phase mainly benefited the transport operator (1988, p.18). Much of this activity took place within the context of the 1962 Action Programme, although this Programme was later abandoned (Hamilton, 1990, p.14). However, the development of a common policy was blocked by a dispute over whether air and maritime transport were legitimate areas of EU policy. Following a Court of Justice ruling, which concluded that these two means of transport were within EU competences, these two areas were added to the transport policy arena.

2. The development of infrastructure: 1973-1987

This phase followed the first enlargement of the Union, which saw attention turned to the development of a European ‘network of infrastructure’. The shift of attention away from the operator towards infrastructure was important in that, first it took the CTP into the arena of direct negotiation with national governments on public expenditure, an area fraught with political and ideological conflicts. Second, because infrastructure is a critical

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Politics (1994) 14(2) pp. 67-73 Transport Policy in the European Union 0 Susan Baker

dimension of regional, energy and land use policies and has considerable social implica- tions, the potential existed to bring transport policy into the mainstream of socio-economic development planning (Whitelegg, 1988, p.18).

However, this potential was not realised. Rather during this phase the Commission continued to put forward proposals which were subsequently ignored by the Council. Yet the need for a coherent CTP continued to be felt. In particular, the second enlargement of the Union added further demands for the development of infrastructure that would draw in Southern European member- states into a common transport network. Eventually in 1983 the lack of progress led to the European Parliament taking the Council to the European Court of Justice and, as we have seen, the Court ruling in 1985 against the Council.

3. A new impetus: 1987 Onwards

Following the 1985 Court ruling and the subsequent Single European Act 1.988, the first steps towards the creation of a CTP were made (Hamilton, 1990, pp.3940). The first EU regulation on maritime transport, for example, came into force on December 1986. The first phase of air transport liberahation started in December 1987 and steps towards the liberalisation of road transport were agreed in July 1988. Commitment to infra- structural development, through funding from the European Investment Bank, was also forthcoming, a commitment re-alKrmed under Title XI11 of the Maastricht Treaty (Commis- sion, 1992a, p.7).

Despite this new flurry of activity, however, progress remained slow. Little has been achieved concerning the creation of a common inland transport market. Further- more, while the progress on liberalisation of air transport had made some headway, it has also brought some severe adjustment problems. Moreover, only slow progress has

been made in the removal of trade barriers. For example, the introduction of the Single Administrative Document in 1987 has neither reduced delays nor the costs of inter-Union transport, as predicted (Lodge, 1989, p.90).

Despite this poor performance, what is important about this latest phase is that there is increased awareness, especially at the level of the commission, of the necessity to develop an integrated transport system for Europe as a whole. This is reflected in the Maastricht Treaty, under which the Union is now committed to the integration of regional, environmental and social considerations, including social and economic cohesion, into transport policy. The 1992 White paper Com- mission Communication on the Future Development of the Common Transport Policy provides a first step in th~s new direc- tion (Commission, 199213). Furthermore, in response to the environmental concerns the Commission is committed to achieving what it terms ‘sustainable mobility’ (Commission, 1992c, p.vii). However, we will have to defer judgement on the incorporation of environmental considerations into the CTP until such time as this rather vague term is translated into actual poky.

Developments in specific transport modes

One of the consequences of the failure to develop a CTP is that little attempt has been made to prioritise and co-ordinate the development of different transport modes. Differ- ent member-states give priority to different transport modes, a difference that arises partly as a result of the accident of geography. The Netherlands and Greece for example are more keen to develop maritime transport, while France has given greatest priority to rail. In the face of these differing priorities the EU has not been successful in imposing a EU-wide logic on the development of different transport modes.

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Transport Policy in the European Union Susan Baker Politics (1994) 14(2) pp. 67-73

Road

Despite the fact that in 1988 member-states agreed to target 1993 as the date for the achievement of road transport liberalisation, the Commission has had little success in creating a single market in road transport. Successful policy outcomes have been delayed as member-states continue to act primarily in their own interests. As a consequence issues relating to infrastructure funding, cabotage, safety rules and the protection of the environment remain out- standing.

Only one piece of legislation with long term significance was passed in the thirty years following the signing of the Treaty of Rome. This was the Regulation establishing a ‘Common Quota’, entitling the holders to carry out unlimited transport between any pair of member-states. The common quota was designed to free the market by removing national and institutional obstacles to the movement of road freight traffic. In 1988 this Regulation formed the basis for the adoption of common rules governing road transport.

EU transport policy also influences and is influenced by policy in other, non-member states. Three countries, Austria, Switzerland and the former Yugoslavia, collectively known as ‘transit countries’, are particularly important. EU policy with respect to transit countries has been criticised for being ad hoc. For example, Austria, which lies across the direct route between Germany and Italy, has a mountainous terrain that makes construction for new roads very expensive and its domes- tic transport policy lays emphasis on rail transport. This does not suit the needs of EU member-states and as a consequence, the EU is currently funding road development in Aus- tria, even thought it is not a member of the Union.

Air

Traditionally, air transport systems have been heavily dominated by State ownership. Given

its commitment to the completion of the single market, the present concern of the Commission is to increase liberalisation and in particular to increase access for private air- line companies to the European market and to reduce the overall signtficance of state holdings (Club of Bruxelles, 1989, p.10).

In line with this, in 1978 the Council of Ministers adopted the first programme of priorities for air transport. However, it was not unul December 1987 that the first set of proposals were adopted with respect to the liberalisation of air transport. Harmonisation measures, especially in the social and technical fields have also been introduced, including a number of Regulations relating to competition rules, practices and partnership arrangements. A Directive on tariffs has also been passed and a Decision on capacity sharing (Club of Bruxelles, 1989, pp.10; 80- 81 1.

Maritime

Shipping is one of the few areas of EU transport policy that is relatively coherent. Ths may in part be due to the fact that since the 1980’s the Union, along with the rest of the world, has seen a down-turn in maritime traf fic, partly in response to economic conditions and partly in response to structural change. Faced with this threat there has been a com- munality of interest across the member-states that has helped to shape a relatively coherent EU-wide shipping policy.

Since 1985 Union action on shipping has been guided by a number of basic principles, aimed at regaining Union competitiveness and stimulating competition (Whitelegg, 1988, pp.138-39). In 1986 the first competition measures were adopted concerning cabotage and unfair practices from third countries, including the issuing of four Regulations (Economic and Social Consultative Assembly, 1991, p.10). Iater in 1988, in what was known as the ‘Hyundai Affair’, the Commission imposed anti-dumping duties on the South Korean transport company, Hyundai Merchant

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Politics (1994) 14(2) p p . 67-73 Transport Policy in the European Union 0 Susan Baker

Marine, for adopting unfair pricing practices (Club of Bruxelles, 1989, p. 123.124).

In 1989 the Commission began a second wave of measures, designed to deal with the three areas where it saw the European fleet as most threatened, namely: owner&@, flag and sailors, that is who owns the ships carrying EU goods, where they are registered and who is employed on board. The Union’s aim is to counteract competition from South East Asia through ensuring that ownership, flag and sailors remain in Union hands.

Rail

Rail transport has proved particularly difficult to develop at the EU level. This sector is still heavily influenced by national policy. For example, British government policy is heavily biased against investment in public transport, whereas other member-states, most notice- ably the French, are pursuing policies of increased investment. According to Whitelegg the problems encountered in developing an EU-wide rail system are symbolic in that they highlight one of the problems of the CTP, namely imposing an ‘European logic’ on the disparate and dsunited transport systems of member-states (Whltelegg, 1988, p.31).

At present the major emphasis of Union rail policy is on the development of a ‘Eur- opean high-speed rad network, linking major urban and industrial centres. In particular there are plans to strengthen the link between the German, Italian and French net- works, as well as developing the Paris- London-Amsterdam-Cologne-Frankfurt links. In marked contrast to the current depletion of the British rail system, the development of these links is adding a new impehis to the r d sector on the continental mainland of the EU.

Accounting for the failure to develop a CTP

A number of explanations have been put forward to account for the failure of the EU to

develop an adequate CTP.

Accidents of geography

Geographical features have affected the development of a CTP in a number of ways. First, the EU is not a unified geographical area. Thus, some member-states, especially Ireland and Britain, have surface transport systems that are independent of the European mainland and therefore have had little interest in the elaboration of a CTP (Button, 1984, p.9).

Second, geographical position has meant that member-sates have given different priority to each transport mode, some emphasising maritime transport, such as Greece while others, such as France, place greater emphasis on dways .

The nationality principle

The provision of infrastructure and paying for its use has also proved a major stumbling block. Payment for infrastructure use, such as through road tax or tax on fuel, remains with the country in which the vehicle is registered. This, known as the ‘nationaltty principle’, has led to the problem of determining how haul- iers are charged, and on an equitable basis, for using member-state transport infrastructure.

Different state traditions

Button argues that the root cause of the failure to develop a CTP lies in a conflict between the Anglo-Saxon and the Continental approaches towards transport. On the one hand the Anglo-Saxon philosophy is essen- tially a commercial approach concerned with maximising efficiency within the transport sector. On the other hand the social philosophy in continental Europe treats the provision of transport as a state obligation as well as an instrument in a wider social framework and focuses on the role of transport in achieving larger, usually dstributional objectives. The presence of these two different traditions has


Transport Policy in the European Union 0 Susan Baker Politics (1994) 14(2) pp. 67-73

made reconciliation on the area of transport policy difTicult and therefore has diminished Union actions in this policy field (Button, 1984, pp.11-15).

Absence of political will

According to the Club of Bruxelles, the failure of the EU to develop an adequate transport policy lies in the absence of political will, arising from major differences of opinion between member-states concerning the priorities that should be attributed to Merent transport modes. Road transport has been particularly important in the Benelux countries while in Germany and France, where dis- tances are greater, rail is more to the fore. Similarly, the distance factor has been important in determining the priority that Germany affords to railways, whereas in Britain the maritime transport remains of strong importance, especially for trade (Club of Bruxelles, 1989, p.3).

False assumptions

Whitelegg sees the root of the problem as lying elsewhere. He argues that from the outset, EU transport policy has been based on a series of implicit assumptions, namely:

improvements in transport infrastructure will generate economic development; freeing the operators from restrictive regulations and fostering free competition will improve efficiency; improving journey times is the same thing as improving transport provision (whltelegg, 1988, p.6).

He argues that all three assumptions are questionable. First, there is little reliable evi- dence to support the hypothesis that improved transport will generate economic development. Second, there is reason to believe that operators do not pass benefits on to consumers and, he argues the third assumption reflects a fundamental misconcep-

tion about transport and the related activities that underpin transport policy, namely that

The underlying philosophy of the CTP is one which reinforces the importance of free market mechanisms and the narrowest of views about operator-orientated costs and benefits, together with a poorly developed sense of transport’s links with the wider economic and social environment (Whitelegg, 1988, pp.6-7).

Whitelegg uses these arguments to present a most damming criticism of the CTP, which he says is an ineffective policy pursued in an indifferent manner based on simplistic economic notions (Whitelegg, 1988, p.201).

Conclusion Since its early phase in the 1950’s EU transport policy has undergone some changes in emphasis. The first phase was mainly concerned with helping the operator by removing distortions to fair competition and allowing companies the freedom to provide transport services across the EU as a whole. However, especially given the drive to complete the internal market, the emphasis of policy has changed. The EU is now more concerned with the development of an integrated transport policy, a major part of which is the funding of a network of infrastructure. Despite this change of emphasis, however, little has been achieved, especially in imposing an EU-wide logic on the development of different transport modes. In th~s respect, the creation of a CTP is still a long way from completion and varying, although not neces- sarily conflicting, explanations exist for the failing.

Furthermore, the EU has failed to take account of the wider significance of transport policy, especially for regional development and for the environment. With respect to the environment, Union policy has often contributed to the environmental degradation

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Politics (1994) 14(2) pp. 67-73 Transport Policy in the European Union 0 Susan Baker

directly, for example through its funding of road building programmes (Baker, 1993). Furthermore the Union has also contributed indirectly to environmental degradation, through, for example, its policy of completing the internal market. It is expected, for example, that car mileage alone will increase by 25 per cent by the year 2010 while the increase in tonnes per kilometre carried by roads is expected to exceed 40 per cent as a result of the development of the single market (Com- mission, 1992, p.73). In failing to take account of the wider significance of transport policy, &he EU has lost an opportunity to develop a coherent, integrated approach to two of the major policy issues currently facing the Union.

1. As of November 1993 the European Community (EC) has officially changed it name to the Eur- opean Union. For the sake of simplicity, the name European Union (EU) will be used throughout this article, even when referring to past actions taken by the then EC.

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Travelling Fast to Get Nowhere: Transport Policy in the European Union

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