The "economic patriotism", which is referred by EU chief Jose
Manuel Barroso as "nationalist rhetoric", is frequently seen in
French media. It means efforts by the national power to fend off
takeover of domestic large enterprises by foreign businesses.
French Prime Minister Dominique de Villepin officially put
forward "economic patriotism" last July to stall at all costs the
prospect of passing the French dairy giant Danone on to the US
drink giant PepsiCo. PepsiCo then denied its intention of
takeover.
In February this year, the news about the possibility of Italian
energy group Enel taking over French utility giant Suez, French
largest water and environment company, prompted the French
government to declare within 72 hours over a breathtaking decision
of a merger between the state-controlled Gaz de France and Suez.
The deal makes Europe's second largest energy group with an annual
operating revenue of € 64 billion and the government holding 34 to
35 percent of stakes.
The French government believes that would block Enel's offer.
France is apparently promoting the "economic patriotism" as a
national strategy and is ready to mount a defense against any
exotic "hostile takeover". The government thinks it is its
responsibility, amid the global surge of acquisitions, to watch
over the country's large enterprises in energy, transportation,
military and food processing industries which are part of the
national economic lifeline and interests. The "economic patriotism"
is widely applauded by the French political and industrial
circles.
In recent years, France has built up experience in safeguarding
its businesses. In 2003, the energy and power giant Alstom was
turned into a state-controlled company after the government bought
30 percent of its stakes as an bailout to its severe financial
crisis. Similar relief was also given to the power giant EDF. Those
cases provide empirical foundation for the concept of "economic
patriotism".
The landscape of the French society lies behind the "economic
patriotism". Different from British or American companies where the
interests of shareholders and economic benefits always go first,
French businesses are operational in both economic and social
sense. Employees are much more attached to their businesses all
their lives. Securing a home company has a direct bearing not only
on the national interest, but also the social stability. Concerns
and even fears over job cuts and social welfare slash are the
natural result of any prospect of a domestic company falling into
control of a foreign rival in a country facing sluggish economy and
high unemployment.
Some European economies built on the Rhineland model, the social
market economy not compromising justice to economic success, face
similar paradox although they do not jump the bandwagon of the
"economic patriotism". They are principally as resolved as France
on fending off exotic takeovers.
The Spanish government, for example, waged a campaign against
the German energy group E.On's attempts of acquiring Spain's
largest electricity company Endesa. The global surge of mergers and
acquisitions has met the harshest defense in Europe. The economic
nationalism does not fade away in the "old Europe" amid the
economic globalization. Instead, it has become a sense of value
being consolidated.
However, along the strong wave of globalization, the
cross-border capital flow is irreversible. Even some European
enterprises, including some French banks and iron and steel
businesses, have done that by making mergers and acquisitions
beyond the boundaries. The same advocators of the "economic
patriotism" are silent to the expansion of businesses of their own
countries. That shows the double standards they hold.
Given that, the "economic patriotism" carries the hallmarks of
not only "neo-protectionism", but also national egoism. That
happens under historical and realistic contexts. But it is not
worth any hail anyway.?
(People's Daily March 14, 2006)
