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European Competition Policy and the German Army

How did the European Court of Justice help the German army to attract customers?

January 20, 2000

How did the European Court of Justice help the German army to attract customers?

About 3,000 German troops are participating in NATO's so-called SFOR — or Stabilization Force — that is watching over the brittle peace in war-torn Bosnia. Not surprisingly, there are very few amenities on the drab and sprawling military base where many of the Germans are stationed.

It is also not surprising, then, that several of the units stationed on the base are now operating makeshift pubs, giving soldiers a place where they can down a couple of Becks while eagerly awaiting the end of their six-month tour of duty.

A recent decision by the EU's Court of Justice not only rectified an outdated model of national defense, it restored competition among pubs run by German military units.

But since some of the pubs' profits go toward meeting the common expenses of the units — such as throwing birthday parties and the like — the pubs actually compete with each other to get customers in the door. And, until recently, one pub in particular seemed to be benefiting from an unfair competitive advantage.

As prescribed by the German constitution, the 4,500 women in the German military could serve only as musicians or medical personnel. In Bosnia, that meant that the only place you would find German women was in the medical unit. It also meant that, among the German males stationed on the base, the medical unit's pub was easily the most popular place to drink.

Enter the European Court of Justice. In mid-January, the justices in Luxembourg ruled that, by limiting the opportunities of women in the military, Germany was practicing unlawful sexual discrimination.

Thus, not only has the Court rectified Germany's outdated model of national defense, but the verdict should also restore competition among the many pubs run by German military units.

As so often is the case, leave it to European Union institutions to dismantle national monopolies and move member countries along the road to a more effective competition policy.

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