“Economic nationalism” on the sidelines of the Summit. With the dispute over “economic nationalism” not featuring among the topics for discussion at the European Spring Council, it invited itself on the sidelines of the official debates. Prior to the Summit, Italy tried to have it brought in through a letter opposing “patriotism” in this area, a letter which was to have been signed by several Ministers and submitted to Heads of Government. But no one signed it. Some governments said that, while they agreed with the principle, they wanted to avoid giving the impression they were criticising another Member State, and all felt it was not the time to bring an element of discord into debates. During the meeting, it was a more general matter of free competition and opening energy markets. This did not prevent at least two members of the European Council from speaking at length about it in their national press conferences following the session; President Jacques Chirac (France generally being seen as the target of Italian comments) and the Luxemburg Prime Minister (to clarify some basic points of principle in his usual straight-speaking way).
Jean-Claude Juncker had the political courage and the clear-sightedness to go beyond “politically correct” language where all government involvement in mergers and hostile takeovers would be outlawed. Excesses in this direction have always astonished me. As long as the European Treaties say nothing about the ownership of companies, nationalised companies are legal, and fall logically under the control of a Minister. How is it possible to prevent this Minister from taking a position and how can one be surprised if, as a member of government, he/she defends national interests? In an interview on the eve of the Summit, Mr Juncker said it was normal that governments had their say, even on companies that were not nationalised, especially if they were shareholders in these companies. In his opinion, it was normal that, without intervening in the management of the financial market or the stock exchange, they asked questions about the industrial vision behind a merger or hostile takeover bid, about the repercussions for a region or a country and about what was to happen to the workers. He pointed out that Arcelor (thanks to which European steel making still has a world role) was born of the merger of Usinor, Arbed and Aceralia, and that his government had, at the time, spoken as a shareholder in Arbed and as a country where a part of the factories were located: the subtext read, now that Mittal wants to take over Arcelor, similar action would be appropriate. As for taking national interests into account, Mr Juncker said, “Those who want to see nation states disappear are badly mistaken. Europe must take into account that nations exist, by, on occasion, cutting their claws to remove what is excessive, pernicious or directed against others. But nations are not the provisional inventions of history”. And on the general level, he confirmed, “Europe cannot be reduced to a single market. Very often the rules of the market produce good results, but, from time to time, government intervention can have its merits. I refuse an exclusively ideological approach”.
The missing section. For his part, Jacques Chirac strongly rejected claims that France was protectionist: “Those who say that should go back to school first”. And he quoted IMF statistics to prove his point. While considering that discussions on economic protectionism were “a fashion among superficial observers”, he criticised hostile takeover bids that were “purely financial and lacking in economic basis”. Afterwards, Mr Juncker seemed to regret that there had been no debate at the Summit, after the flood of accusations and diatribes of the preceding days. But often, said the President of the Eurogroup with his priceless irony, “heroes arrive in Brussels tired …”
In my opinion, there is one section to this debate that is lacking: the distinction between transactions within the Community, i.e. between companies and countries that are subject to the same rules, and transactions launched from outside. This is a distinction that some Member States reject out of hand, and yet it is justified at least in the energy sector by the fact that energy is now one aspect of foreign policy.
The role of the Commission. In the current situation, the role of the EU, and of the European Commission in particular, is clear: to apply rigorously and ensure respect for Community rules in the three sections relevant to mergers and acquisitions: competition rules, single market rules (banning obstacles to free movement of capital) and specific standards applicable in hostile takeover bids which will soon apply in all Member States. This will be my subject for tomorrow.
(F.R.)