The true face of French protectionism reveals itself; and what a sight?!
When one of my friends mailed me the latest news in the saga of governments protecting their energy/utility sectors I was stunned. My starting point with this post is France and although I have reported about France and protectionism before (here and here) I imagine that nothing could be as telling as the latest news which really reveals the ugly and hideous face of petty French protectionism.
"Dominique de Villepin, France’s prime minister, outlined fresh plans to boost employee share-ownership and to use the Caisse des Dépôts et Consignations (CDC), the biggest institutional investor in the CAC-40, into a domestic buffer to ward off foreign takeovers.
Mr de Villepin said: “We need to consolidate the capital of companies and protect them against hostile operations.” He said that “fragmented share capital” was a big risk for the independence of French companies."
This case mirrors the recent flurry in Europe about government's right or duty (?) to protect strategic sectors of the economy from foreign takeovers which by definition are deemed hostile to everybody and everything. For a good overview of the flurry see the post before this as well as A fistful of Euros which has some very good and to the point posts about the subject.
In the meanwhile lets deal with the FT article about the recent French initiative to thwart the single market. I ask the simple question; why? In my opinion the French, as well as the general, upheavel over mergers and takeovers in especially the utility sector comes on the back of a semi-energy crisis when Russia turned off the taps. This made European policy makers think ... and the initial answer was rather comforting: Lets have a common energy strategy and policy! Now this have turned in to a nationalist movement of shielding industries from foreign capital e.g. through using a poison pill strategy. When will European governments realize that the single market is good for them and that the strategy of closing their borders off from foreign capital perhaps is the worst strategy to employ. For French policy makers it has historically been a tradition to point out national champions to be a beacon for France on the global scene, this must now definitely be abandoned as a policy of the past if France wants to have any remote possibility of rising from the current economic slump it is experiencing.