'The end of laissez-faire': France's government gives itself the power to block GE's Alstom bid

With the economy growing absolutely zilch in the first quarter of this year, state intervention is not going to help France get back on track.

by Rachel Savage
Last Updated: 15 May 2014

France’s government really can’t resist some old-fashioned economic intervention. After the debacle of the 75% tax rate last year, it has now given itself the power to block foreign takeovers in industries it has decided are ‘strategic’.

The decree, signed late last night by economy minister Arnaud Montebourg, who once told Indian tycoon Lakshmi Mittal he was ‘not welcome in France’, gives him veto power over General Electric’s $17bn (£10bn) bid for Alstom’s energy business, should he choose to wield it.

Montebourg has said favours a ‘European solution’ potential rival bid by Siemens, which would involve effectively swapping the French company’s power assets for the German industrial powerhouse’s high speed trains (Alstom makes France’s zippy TGVs).

The mouthy minister argued the GE deal would be ‘absorption’, compared to an alliance with the Germans. He had, however, said he was fine with the now dead Publicis Omnicom merger, claiming it was a marriage of equals.

‘We have to arm ourselves at the national level. France can’t just make speeches while other states are taking action,’ Montebourg told Le Monde newspaper, adding that the EU doesn’t sufficiently protect member country’s assets.

An interfering state is bad news for the beleaguered French economy, which failed to grow at all in the first quarter of this year. Foreign companies aren’t going to bother themselves investing somewhere which might turn on them at any moment. As Montebourg said himself, ‘It’s the end of laissez-faire.’

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