Nokia Fallout

There's quite a bit the European Union might be guilty of, but it's not responsible for Nokia's decision to shut a factory in Bochum. The premature accusations from German politicians that EU subsidies were used to move the factory to Romania are wrong. The charges are another example of a well-loved reaction: someone has to be held responsible whenever there are domestic problems, and the soulless bureaucratic machine in Brussels can always take the blame. It's not the first time that politicians have pointed to Brussels -- even though the problems are of their own making.

In the North-Rhine Westphalia state election in 2005, the scapegoat was an EU service industry initiative, which was brought about by none other than then-Chancellor Schröder. Then it was Economics Minister Glos who thundered against an EU subsidy scandal when AEG moved a plant from Nuremberg to Poland, also in 2005. Again in that instance, there was nothing behind the accusations.

And now it's Nokia and Bochum. The Finnish cell phone giant is moving to an industrial park in Romania, whose first stage of construction was partially financed with EU funds seven years ago. There is absolutely nothing to find fault with. This kind of thing happens all over the EU, including in structurally weak parts of eastern Germany and the Ruhr region, which also receives EU funds.

As painful a situation as it of course is for the employees involved in Bochum, it is an everyday occurrence for European companies to set up their production wherever inside the European Union they believe to have come across the best conditions. It's a part of the collectively sought after single market.

It's possible the Finns also weren't all that happy back in the 90s when Nokia decided to move from Finland to Bochum. But there weren't any German politicians complaining then. The awareness that a single European market has winners and sometimes even losers does not seem to be very pronounced. EU Commission President Barroso was right when he said that, overall, the German economy is counted among the winners of the bloc's growing market.

It's also not just foreign companies moving their production to other EU member states, but also German ones. The key factors going into these decisions are usually expenses, such as salaries, energy, transportation and tax -- not other promised benefits. The subsidies are, at the most, an extra advertising tool used by the cities to attract companies.

This competition also exists within Germany and within North-Rhine Westphalia. Bochum, Essen, Oberhausen, Cologne and Düsseldorf: all of them compete with each other when it comes to attracting companies. At the European level those cities are replaced by Germany, Slovenia and Romania.

Welcome to borderless single market.

Bernd Riegert is DW-RADIO's Brussels correspondent (sms)