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For example, Europe has had state monopolies in transport, postal services and telecommunications. Through its Treaties, the ® European Union has at its disposal a wide range of competition policy instruments for banning cartels in the European ® single market, prohibiting the abuse of dominant positions on the market, ensuring equal treatment for public and private enterprise, imposing merger controls and monitoring national subsidies. Because of the globalization of the economy, however, the European Union finds itself increasingly confronted with the problem of reconciling the maintenance of competition within the European single market with the competitiveness of European enterprises on the world market.

Breakdown of Union expenditure 1988 1996 59% 48% 18% 31% 2% 11% 2% 4% 3% 1% 4% 3% 3% <1% 6% 5% Agriculture (EAGGF Guarantee) External action Structural operations Administration Research European Coal and Steel Community (ECSC) Other internal policies European Development Fund (EDF) In addition to agricultural policy and the Union’s administrative expenditure (which accounts for around 5% a year), there are four main policy areas financed by the general budget (not including the CFSP and justice and home affairs): structural policy, development cooperation, ® research and technology and other 33 EUROPE FROM A TO Z 34 policies (® culture, ® energy, ® industry, ® transport and the ® environment).

Research and technology), Parliament may amend the Council’s spending proposals, within an annual margin calculated by the Commission, and, acting by a qualified majority, have them adopted even in the face of opposition from the Council. Since the distinction between compulsory and non-compulsory expenditure determines whether the Council or Parliament has the final say in setting the level of spending, it has been the subject of a power struggle between the two institutions. Other stages in the procedure are as follows: (i) the Council adopts an amended draft, taking into account Parliament’s amendments and proposed modifications; EUROPE FROM A TO Z (ii) under the special ‘conciliation procedure’, the Council and Parliament try to close the gap between their respective positions; (iii) Parliament examines the draft budget at second reading and establishes the budget in its final form.

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