German economic liberalism opposes government intervention: expert

Deputy Chairman of the Sub-committee for European Law of the Legal Committee of the German Federal Parliament (Bundestag) Stephan Thomas has said that competition is the cornerstone of the German social market economy which is founded on the values that are elementary to German society.
He was talking to the delegation of the representatives of the Competitive Commission of Pakistan (CCP), members of the parliament and experts from Pakistan who visited Germany recently on the invitation of Friedrich Nauman Stifftung fur die Freiheit (FNF) to attend the conference on German and European Cartel Law in legal and politico-economic practice. During the stay they visited federal as well as provincial cartel offices, Federation of German Industries (BDI) as well as legal experts on cartel and competition laws.
Stephan said that in Germany we follow the values of freedom, initiative and responsibility. He said that it is the fact that competition leads to the best economic result. He added that public-private Partnership is not a classical way we follow in Germany. Economic liberalism opposes government intervention on the grounds that the state often serves dominant business interests, distorting the market to their favour and thus leading to inefficient outcomes.
He further said that economic liberalism is the ideological belief giving all people economic freedom, granting them more bases to control their own lives and mistakes. Head of the Department of Competition, regulation and Privatisation policy and Federal Minister of Economics and Technology Dr Armin Jungblut said that there are some state owned companies in Germany but government don't interfere in market economy.
Armin said that European countries especially UK is open to foreign investment but in Germany and France they follow the nationalistic approach and foreign investment policy is not as open as it is in UK. He also said that in Germany press is free and the president of the cartel is respected by both public and press.
Germany's overall economic policy is grounded on the principles of the social market economy, and this approach has proven to be effective, particularly during difficult phases of economic cycles. It is especially important for a forward-looking economic policy to ensure sustained conditions for greater employment in Germany.
Talking about the objectives of the Federal Ministry of Economics and Technology Armin said that its objectives were to shape the conditions that foster successful economic activity on the basis of personal and entrepreneurial freedom, competition and stability. The Ministry's legislative, administrative and co-ordinating functions in areas such as competition policy, regional policy, SME policy, energy policy, and external economic policy are geared to this task.
Managing Director Department of Competition, Procurement and Consumers of Federation of German Industries (BDI) Niels Lau and Dr Ulrike Suchslan discussed changes in competition law with reference to the German Industry. They said that BDI represents 37 board members association with over 100,000 industrial business men and approximately 8 million employees of the companies represented 98 % of small and medium sized enterprises (SME's)
BDI does not believe that introducing EU class actions is the right course to take and therefore expressly rejects this approach. It is the function of the national civil and procedural law alone to establish parameters necessary for ensuring effective compensation for injury. Many members of states, including Germany, have greatly bolstered the rights for consumers and parties who are detrimentally affected by antitrust violations.
We urge that efforts should rather be focused on evaluating and further developing the existing European law enforcement mechanism. These include for example, the regulations on the creation of a European enforcement order for uncontested claims, on a European order for payment procedure on establishing a European small claims procedure and the directive on minimum rules relating to legal aid.
BDI also believes that the enforcement of public interest by private parties, as promoted by the European Commission, is not appropriate. This would greatly endanger the area of antitrust law, in particular, the effectiveness of the leniency program and the hope for impact of the antitrust settlement procedure recently adopted by European Commission. The authorities operating in the area of antitrust law are well equipped to impose fines and skim off the economic benefit attained through breaches of antitrust law. It would be wrong to use individual victims as instruments to enforce state regulatory policy.
Germany and majority of the member states also recognise the fundamental principle that that the defendant in an action for damages is only liable if it was a fault. The requirement of the fault must be retained. Presumed fault and a reversal of the burden of proof to the detriment of the defendant would not be reasonable and would represent encroachment upon the legal frame work of Continental Europe. It is imperative that amendments in substantive law through the back door of civil procedural law are avoided.
Dr Jurgen Kuhnen presiding judge at the Higher Regional Court in Dusseldorf briefed that participant about the institution and the course of cartel law proceedings, the leniency program and how is it handled in practice, is important for carrying out the proceedings and legal issues. He also briefed the participants about the powers of the investigation authorities, inspection visits, House searches and how to react to resistance. He said that decisions regarding the cases of cartel were given fare dealing. He said that media is allowed to report the case.
Head of the North Rhine -Westphalian Energy Cartel Authority Ms Gabriele Krater discussed with the participants the jurisdiction of Cartel Authorities at provincial level. Dr Silke Heinz Lawyer for Cartel Law, European Law and Dr Tilmann Kuhn lawyer for German and European Cartel law briefed the participants about the tasks and positions of lawyers with regard to German cartel law and the role and function of attorneys in German antitrust law.
Christof Vollmer from 10th Division of Bundeskartellamt discussed the tasks of the Bundeskartellamt with in the system of competition authorities. He also discussed the act against the restraints of competition. He briefed the participants that in Germany, the Acts against Restraints of Competition (ARC) set the rules and provides the legal frame work with in which the market participants can operate. Since 1958 it has been the task of the Bundeskartellamt to enforce the ARC to protect competition in Germany.
General Secretary Monopoly Commission Dr Host Grieffenberg in his presentation told the participants about the Monopolies Commission's main task which was to access the new completion policy instrument to be used in the Bundeskartellamt's decision making practice.
From the legislator's perspective, the Commission is an advisory body which provides the Federal Government with competition policy, advice on economy and economic issues. Its structure was modeled on the German Council of Economic Experts (the Five Wise Men). The focus of the Council of the Economic experts however is more on over all economic issues (price stability, economic growth, full employment, external balance). The Monopolies Commission mainly prepares expert opinions on markets or sectors of the economy.
The five members of the Monopolies Commission are proposed by the federal government and appointed for a term of four years. Re-appointment for a further term of four years is possible. So far the commission has comprised two university professors (a legal expert, an economist and three entrepreneurs. However, this is not prescribed by the law.
Senior Fellow Center for European Studies (ZEI) University of Bonn Klaus Bunger briefed the delegates about the EU a market economy, guiding principles of German and European competition policy, principles of German and European cartel law, How to regulate network industries and market failure and Industrial Policy.
Klaus said that the German and European rules for public procurement are nested in many ways. The various regulations contain rules for both national and European procurement procedures. In addition member countries often play their own rules; Germany has got separate state laws. All together despite many attempts at reforming and simplifying the laws and procedures (eg German amendments of 2009/ 2010, intended EU Reform 2012) the procurement regulations are a fragmented, extremely confusing, complex, complicated, indeed questionable judicial system. Hence the system of German and European public procurement law is a role model one should copy.
Talking about market failure and industrial policy Klaus said that there are two ways to respond to market failure. Firstly competitive structures linked to a regulation of the monopolistic bottlenecks areas may be created by government intervention wherever possible. Secondly the state takes the place of the market and corrects market failures through nationalisation or an interventionist industrial policy affecting all sectors. The second option has been practice quite often in Germany.
The participants also visited the Friedrich Naumann-Stifftung fur die Freiheit head office Truman House where Head of South Asia, South East and East Asia Mortiz Kleine-Brockhoff and Desk officer South Asia Maria Schneider briefed the delegates about the advancement of liberal polices in the world and role of FNF in this regard.
They said that FNF is a non-profit organisation that promotes liberal democracy, respect for human rights, rule of law and economic freedom. The foundation operates in more than 60 countries around the world, exchanging knowledge and experience with civilians, NGO staff, academics, politicians and policy makers. In conjunction with its partner organisations, the foundation provides policy consultation as well as educational programmes to create a more open world where people live freely and in peace.