Merkel, Macron Push for New EU Merger Rules After Rail Veto
(Bloomberg) -- German Chancellor Angela Merkel and French President Emmanuel Macron stepped up their campaign to overhaul European Union antitrust rules so that companies in the region can better compete with global giants in the U.S. and China.
The EU’s increasingly tough merger reviews frequently target German and French firms. That’s frustrating Merkel and Macron, who want to see companies from the continent leading the way in sectors from technology and telecommunications to transport and aerospace.
Current EU antitrust rules foster doubt “about whether we can really create global players,” Merkel said in a speech at a technology conference in Berlin Tuesday. Peter Altmaier, her Economy Minister and close ally, later presented a Franco-German industrial manifesto with French Finance Minister Bruno Le Maire in Berlin that detailed their strategy to alter competition regulations.
“We must find a European willingness to change competition law,” Merkel said. The “best solution” would be a set of global rules that create a level playing field, she added, but acknowledged that “we have not had much success up to now with this way of looking at things.”
Merkel and Macron’s latest efforts follow the EU’s decision this month to block Siemens AG’s bid to create a rail champion with French rival Alstom SA. Altmaier and Le Maire’s “Franco-German Manifesto for a European industrial policy fit for the 21st Century” seeks to ensure that European companies can “successfully compete on the world stage” and remove their “massive disadvantage” due to a lack of fair competition.
“Of course, we must continue to argue for a fairer and more effective global level playing field, but in the meantime, we need to ensure our companies can actually grow and compete,” the manifesto said. “Today, among the top 40 biggest companies in the world, only five are European.”
Proposed measures include:
- Updating current merger guidelines to take greater account of competition at the global level
- Considering whether European governments could override Commission decisions in some cases, subject to strict conditions
- Exploring the potential temporary involvement of public actors in specific sectors to ensure their long-term successful development
EU antitrust rulings have been a particular source of frustration for German companies in recent times. Deutsche Lufthansa AG had to drop its plan to buy collapsed airline Air Berlin on EU opposition in 2017. Deutsche Boerse AG’s planned takeover of a British rival was vetoed, as was a German cement deal, while German carmakers are also targeted by an EU cartel probe, after record fines for truck manufacturers. Deutsche Telekom AG has complained that the EU’s approach hinders telecom deals it says are needed to drive investment.
Current merger rules "reflect the strategic European choice that we want fair competition" and "that we want business to have competitors," EU Competition Commissioner Margrethe Vestager told reporters after a European Parliament event in Brussels. Most of the Siemens-Alstom deal "was perfectly fine" but the companies failed to address antitrust issues that would have lead to "higher prices in signaling, less innovation in higher-speed trains," she said.
European governments “need to do their homework” by easing regulation and investing in better digital infrastructure, Airbus SE Chief Executive Officer Thomas Enders said at the event with Merkel Tuesday.
“If we assume that this data business is going exponential, we’re very ill-prepared,” Enders said.
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