ECB’s Praet Says EU Must Be Very Careful About Industrial Policy
(Bloomberg) -- One of the European Central Bank’s top officials warned politicians in the region against adopting polarizing views on competition, weighing in on a heated political debate after regulators prevented a merger of the region’s top train makers.
“When you’re dealing with competition, it’s very difficult to talk in general terms as has been done in terms of winners and losers, champions and not champions,” Chief Economist Peter Praet told an audience in Berlin. He called recent portrayals of Europe’s supposed economic threats “caricature”-like.
His remarks followed a speech by French Finance Minister Bruno Le Maire, who earlier formed part of a group presenting a Franco-German industrial manifesto to alter competition rules. It’s intended to strengthen European companies’ ability to deal with international competitors after the EU blocked a bid this month by Siemens AG to create a rail champion with France’s Alstom SA.
Praet urged against the use of populist language when describing international competition and argued that the “traditional win-win of trade” still exists. He also encouraged considerations to be made on a sector-by-sector basis.
“I’m not convinced personally by what I read about Siemens and Alstom in the newspaper,” Praet said. “It would be naive to ignore the impact of network industry, the impact in the U.S. of big market concentration, of big firms which are not really efficient.”
He added it’s not clear whether creating a European champion to compete on the external market is “a good deal or not a good deal.”
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