Ports: Europe defeats grand Spanish coalition

On March 8 the European Parliament (EP) greenlighted a Ports Regulation imposing sea port autonomy in Spain, thus heeding a time-honoured demand by Catalonia’s ports

On March 8 the European Parliament (EP) greenlighted a Ports Regulation imposing sea port autonomy in Spain, thus heeding a time-honoured demand by Catalonia’s ports. The new Regulation —a European instruction which all member countries must abide by and literally incorporate into their domestic law— was passed with 451 votes in favour, 243 against and 18 abstentions, despite all efforts by Spain’s diplomacy and the opposition of the main Spanish political parties (the PP, the PSOE and Ciudadanos).

Spain and Italy are the only European countries whose sea ports are not allowed to set their own charges. Instead, these are decided by the central government for all ports alike, which prevents competition on price within those countries. Likewise, profitable ports are expected to transfer some of their revenue to loss-making sea ports, a form of cross-subsidisation between a country’s ports that contravenes EU rules on state aid.

Ten years after Catalonia’s current Statute was passed —a law that failed to grant the Catalan government devolved powers over ports— the EU (the Commission, the EP and the Council) wants to extend the best sea port management practices to all member states, and to establish and guarantee a level playing field that will stimulate competition and complementarity between Mediterranean and Atlantic ports for the sake of all Europe. Due to the lack of railway links with the European markets, nowadays Mediterranean ports are merely local ports serving their own local hinterland: only Northern European ports are gateways for Europe’s trade. In the entire developed world and thanks to individual management —be it public, private or PPM— sea ports turn a profit and are a true workhorse for the local economy. Forty years ago it was the ports’ financial independence that allowed Germany to break the exceedingly inefficient railway monopoly on freight by Deutsche Bahn. Thanks to the investment capacity afforded to them by the management of their own profits, the ports of Hamburg and Bremen helped to set up alternative companies that were able to compete with Deutsche Bahn.

Thanks to its ports —among other agents— today Germany has 250 railway operators. It is the nation where the management of the railway network contributes the most to the economy’s competitiveness. Professor Kay Mitusch, from the University of Baden-Württemberg explained it in a lecture on ports and airports that I organised in 2013, since at the time I was the MEP tasked with drafting the EP’s yearly report on Competition.

This new Regulation is of paramount importance for the Mediterranean railway corridor to achieve its full growth potential: if Catalonia’s ports are not allowed to set their own charges autonomously, how will they be able to compete with Rotterdam and Hamburg for Asian freight? If they are not allowed to manage their own profits and reinvest them, how will they ever manage to bypass the discretion of the incumbent Spanish government to make any necessary future investments?

This might be the reason why the Spanish government is privatising AENA, the state-owned company that manages airports in Spain: sooner or later, a new European Regulation will also ban all cross-subsidisation between Spanish airports and it will rule that they must be managed individually. A month ago, Ryanair’s CEO Michael O’Leary criticised this privatisation in the European Parliament: when I asked him what he thought of it, he replied that it was “a bad move: a private monopoly will be worse than the current state one” and recommended that airports be managed individually.

The current Dutch presidency —Holland was one of the countries that promoted the Ports Regulation— wishes to complete the final negotiations before July. The amendment that obliges Madrid to decentralise the management of sea ports (number 110, article 14.3: “the structure and the level of port infrastructure charges shall be defined in an autonomous way by the managing body of the port") received over 500 favourable votes, as the Greens and some members of the ECR group voted in favour, even if ultimately they voted against the final draft for other reasons. Spain and Italy were left alone with the europhobic MEPs, and the grand Spanish coalition (the PP, the PSOE and Ciudadanos) suffered a clear defeat. This will make it difficult for Spain to muster a blocking minority in the final negotiations, as they announced they would attempt to do. It should be noted that the powerful European Sea Ports Organisation (ESPO) unanimously supports the new Regulation.

This new European Ports Regulation will put federalism and the third way (1) to the test: if the demand of a majority in Catalonia —this time, overwhelmingly endorsed by Europe’s institutions— is aborted “because it contravenes the Spanish Constitution” (PP’s MEP Luis de Grandes said so during the parliamentary debate the day before the vote), it will be the best evidence that Catalonia cannot have a first class future in this century without independence: Madrid would rather see an impoverished Spain than a prosperous one, if prosperity is to arrive through Catalonia’s ports.

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(1) N.T. Some in Catalonia claim that a compromise with Spain, whereby further powers might be granted to Catalonia, is still possible. This notion is often referred to as “the third way” between the current status quo and outright independence.