Merkel Says EU Antitrust Rules Are Naive About Threat of China

(Bloomberg) -- German Chancellor Angela Merkel blasted the European Union’s merger rules for failing to take into account growing Chinese dominance and hampering efforts to compete on the global stage.

In a speech to an industry group in Berlin, the German leader complained that the EU Commission took no account of Chinese competition when it blocked an industry-changing rail deal between Germany’s Siemens AG and France’s Alstom SA.

“How can you say that China won’t engage in Europe in the next five years? I think such a claim is rash,” Merkel said on Tuesday to the BDI industry group. She called again for the EU to alter the rules “in order to be truly competitive.”

It was Merkel’s bluntest critique yet of the EU’s antitrust regime as Berlin and Paris push for more leeway to build European champions with the scale to take on rivals from China and the U.S. France has set out concrete proposals for the EU to take a broader view when assessing whether deals would harm competition in the European market.

Margrethe Vestager, the EU antitrust chief who is bidding to head the next commission, has deflected these calls by pointing to tougher screening for foreign takeovers. She’s instead been pushing for changes to allow regulators to chase down big technology firms, backed by the Netherlands.

In the Siemens-Alstom case, Vestager ruled it was "unlikely" that Chinese trainmakers would be a credible supplier to European railways in the near future.

To contact the reporters on this story: Patrick Donahue in Berlin at pdonahue1@bloomberg.net;Aoife White in Brussels at awhite62@bloomberg.net

To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Peter Chapman

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