A year ago, the French said ‘no’ to the adoption of a European Constitution. In that occasion, Mr. Laurent Fabius (a former left-wing prime minister) took a tough dissenting position within his own political party and advocated against the ratification of the constitutional Treaty. At the time, Fabius’ main criticisms were directed to the overly 'neo/ultra-liberal' nature of the Treaty.
Today, Fabius strikes again in an op-ed published in Le Monde. The few words he as on competition policy are worth quoting:
“Competition policy should change. At the time of global takeovers as well as hyper-competition from Asia and the US, European competition policy does not promote the rise of European industrial champions. On the contrary, this policy is currently an obstacle to that goal, as it is enforced in an ideological, excessively rigorous and counter-productive fashion: examples of this with respect to France are Pechiney, Schneider/Legrand and Mittal/Arcelor”.
[English free translation of : "La politique de la concurrence devra, elle aussi, évoluer. A l'heure des OPA planétaires et de l'hyper-concurrence asiatique et américaine, elle ne favorise pas la constitution de champions européens. Au contraire, elle les pénalise par une approche idéologique, tatillonne et finalement contre-productive: les exemples pour la France vont de Pechiney à Schneider et Legrand, en passant par Mittal et Arcelor."]
Mr. Fabius’ quote contains several striking things. In particular, his chosen examples of merger transactions fail to support his point on the ‘ideological’ and ‘over rigorous’ enforcement of competition policy:
- Alcan-Pechiney: Fabius’ underlying criticism is that the European Commission was too lax. It did not forbid Alcan’s takeover of Pechiney (the latter was subsequently cut into pieces by Alcan with ensuing job losses). In that respect, we don’t see how the Commission would have been ideological or excessively rigorous, as it just let the transaction happen.
- Schneider/Legrand: Fabius’ underlying criticism is that the European Commission was too strict. It forbade the merger for competition concerns (a decision which was subsequently annulled by the CFI, which Fabius omits to mention too).
- Mittal/Arcelor: Fabius’ criticism is unclear. Arguably, Fabius is of the opinion that the proposed merger threatens French steel interests. However, Mr. Fabius omits to point to the fact that Mittal/Arcelor holds all the features of a European steel champion, and that the Commission will most likely approve the transaction.
Thus, if we follow Mr. Fabius’, the Commission should have blocked Alcan/Pechiney and Mittal/Arcelor and cleared Schneider/Legrand. For which reasons? So that these companies keep a French foothold as a way to strengthen/protect national industry. Just let me beg the question: aren’t we also facing there a purely ideological rationale?
Furthermore, Mr. Fabius’ observation that competition policy is enforced ideologically comes as surprising. Mr. Fabius has probably lost track of the fact that the Merger Regulation, adopted in 1989, does not mention industrial policy or employment concerns as grounds for review of mergers. Mr. Fabius’ amnesia is even more surprising in light of the fact that the Commission’s prerogatives/duties have been set out by the Council, i.e. the Member States. Ironically, the text was adopted in 1989 under the French EC presidency, which at the time was under the leadership of Mr. Fabius’s political party and friends (E. Cresson). The Council could perfectly have amended (and still can) the text of the ECMR to include new priorities.
The reading of this book may clarify the reasons behind Mr. Fabius’ surprising statements.
The reading of this paper may open other perspectives on this debate.