Europe After Monti; The race is on to replace the controversial competition czar, and its outcome is critical to the EU's future.

Byline: Stefan Theil

For five years Mario Monti has been the most powerful man in Brussels. As the European Union's competition commissioner, the former economics professor has busted cartels, stopped mergers and fought the protections EU members lavish on favored industries. He has slapped Microsoft with the biggest antitrust fine in history. He killed General Electric's attempt to buy Honeywell. He has taken on the EU's mighty antimarket axis, France and Germany, and forced them to slash billions in illegal aid to state-owned companies.

Now that Italy has refused to renominate Monti to fill another term when his current one runs out in November, EU governments are battling over who will get his post. The lines are drawn straight through Europe's middle. On one side are Germany and France, who are happy to see Monti go. On the other are the likes of Britain, the Netherlands and Sweden, high-growth countries that trust in competition. Monti's successor will help determine whether Europe ever becomes a truly single market of 450 million people dynamic enough to compete with the United States. Competition policy is "where the commission has real power to push forward the economic agenda," says Alasdair Murray, analyst at London's Centre for European Reform. "It's hugely crucial who gets the post."

The agenda shows why. Monti's focus was on opening up banks, postal services and telecom companies to EU-wide competition. He broadened the definition of illegal aid to include all kinds of sophisticated trickery--from Deutsche Post's use of monopoly profits at home to finance global acquisitions to the French government's raising fresh private capital for France Telecom with the promise of future aid. Among his achievements: striking down state guarantees for German public-sector banks and ordering Electricite de France to return a record 1.1 billion euors in illegal tax breaks. Now, a top EU official tells NEWSWEEK, the next big sectors are likely to include gas, airlines and rail networks--all split along national lines, and often highly subsidized. "All this is going to be very sensitive, with huge vested interests at stake," the ...