Germany and France Present Outline for EU Competition Changes
Germany and France Present Outline for EU Competition Changes
(Bloomberg) -- Germany, France and Poland are pushing plans to facilitate big mergers in the European Union, after the bloc shot down an intended tie-up this year between Siemens AG and Alstom SA to create a European champion to compete with China.
The European Commission should introduce “more flexibility” and “take into account competition at a global level” when it analyzes mergers, according to a joint paper from the three governments published on Thursday.
Their concern is that EU rules aiming to maintain competition between firms conflict with the need of European companies to grow globally and to contend with companies from China and other competitors that may receive state aid to drive their expansion.
“We have to take into account the rise of China, the rise of new industrial giants and the necessity of creating new European industrial champions to be able to face that competition,” French Finance Minister Bruno Le Maire said at a summit in Poznan, Poland. “A new world means new rules.”
‘Global Champions’
Paris has been seeking to curb the authority of the European Commission as an independent arbitrator and to give leaders in the EU Council more powers to intervene. The joint paper falls short of suggesting a veto power for the council but says it should become more involved in merger policy.
After seeing companies outside of the EU grow bigger through mergers and expand into European and other global markets, modernization is needed, German Economic and Energy Minister Peter Altmaier said in the Polish city.
The proposal will be transposed into EU law and legislation and create less “market distortion” from unfair practices with competitors in the U.S., India, Russia and China, he said. He added that in some cases, it might lead to new mergers and that authorities in Brussels would still have the power to decide on specific cases.
The plan also has backing from Poland, whose nationalist government has vowed to reshape the European Union’s biggest eastern economy along the model of South Korea and Japan, where governments and “national champions” drive expansion and rely less on foreign investment.
“If we want to run fast, we need to simplify procedures,” Polish Economy Minister Jadwiga Emilewicz said. “We really need a new framework for competition policy to be able to create global champions.”
To contact the reporters on this story: Birgit Jennen in Berlin at bjennen1@bloomberg.net;Misha Savic in Poznan, Poland at msavic2@bloomberg.net
To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Michael Winfrey, Andrew Langley
©2019 Bloomberg L.P.