Macron Is Salvini's Best Friend Really

(Bloomberg Opinion) -- Emmanuel Macron has marked out Matteo Salvini as his arch-nemesis in the fight against Europe’s far right. But his own actions are playing right into the hands of the most powerful person in Italian politics.

The French president is preaching a pan-European agenda abroad, as he tries to win around Germany and other countries to his dreams for a more closely tied euro zone and EU. But back home, on subjects ranging from immigration to industrial policy, he has shown a stubborn penchant for nationalist and uncooperative solutions. These double-standards don’t just expose him to accusations of hypocrisy, they also end up strengthening forces like Salvini who oppose greater European integration.

The latest episode of French economic patriotism concerns the proposed merger between Fiat Chrysler Automobiles NV and Renault SA. The French state owns a 15 percent stake in Renault, making it a key player in the merger talks. There were initial hopes that Paris would stay on the sidelines of the deal, and maybe even decide to sell its shares over time. Instead, Bruno Le Maire, the French finance minister, wants to extract extra concessions from Fiat over jobs and the company’s headquarters, according to a Bloomberg report.

This is a reminder of France’s penchant for dirigisme. Since his election, Macron has tried to shake off France’s image as a country that mistrusts the market economy. His efforts haven’t been entirely convincing. 

In 2017, he chose to meddle with the Italian shipbuilder Fincantieri SpA’s acquisition of STX, a French shipyard, which only progressed after the renegotiation of an agreement struck by his predecessor Francois Hollande. More recently, France has been trying to strong-arm the EU’s antitrust authorities to go easy on some mergers within Europe, after Brussels scuppered the planned combination of Alstom SA’s and Siemens AG’s rail businesses.

Macron doesn’t just stick to economics when he’s trying to have things both ways. Last summer, he rebuked Salvini’s decision to turn away migrant boats as “cynical and irresponsible” but continued to take a hard line on migrants who wanted to cross the Italian border into France. This accords with EU rules but it was hardly in the spirit of sharing the burden and has stoked resentment in Italy.

As with immigration, France’s championing of its own national industrial interests may be self-defeating as it tries to win the broader argument against Europe’s populists. Its position on Fiat may be an excuse for Salvini to take a more interventionist stance too.

When the merger was announced, the League leader said he thought it was “a brilliant deal.” But he also floated the idea of Italy possibly taking a stake in the merged entity. “If Italy is required to have an institutional presence, that would be absolutely appropriate,” he said. Giovanni Tria, the Italian finance minister, says he can see no reason for his country to buy into the new company. But major concessions to the French state might change that.

Of course, Italy has enough problems with its public finances without splashing out on a new nationalization. Indeed, the 2019 budget has slated privatizations worth 18 billion euros ($22.8 billion), although there is no sign of what the government intends to sell. If it sticks to existing plans, buying a stake in a carmaker would mean finding more money elsewhere.

Still, the argument that Italy should have a symmetric weight to France is tempting for politicians – even more so now that Paris is meddling with the deal. The Dutch government chose to buy a stake in Air France-KLM to give it a say on investment and job cuts. The trouble is that such involvement is a recipe for managerial unhappiness (Airbus SE was plagued by it for years). The executives of the newly merged Fiat-Renault would have to spend too much time appeasing warring politicians in Paris and Rome, rather than getting on with running the company.

Macron has won plaudits for his plans to strengthen the EU as the best way to overcome Europe’s rising nationalists. But as long as he too keeps putting France’s narrow interests ahead of other countries, he’ll merely prove his opponents right. It takes more than a few speeches to be a true European leader.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Ferdinando Giugliano writes columns on European economics for Bloomberg Opinion. He is also an economics columnist for La Repubblica and was a member of the editorial board of the Financial Times.

©2019 Bloomberg L.P.

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