Thursday’s edition of the International Herald Tribune features an interesting article concerning the recent European rows about state interference in favour of so-called national champions.
Quoting Elie Cohen, the Tribune’s authors – Katrin Bennhold and Graham Bowley – suggest that both the French government’s allegedly new/refound role as M&A consultant in the Suez and Gaz de France deal (to avoid a bid from Italy’s ENEL) as well as the Spanish government’s attempt to thwart a takeover of Endesa, a Spanish utilty by E.ON, the German power corporation, are indicative of a resurgence “nation state” as a political concept in the Europe of the 21st century.
To be sure, the article correctly explains that conflicts regarding national political influence over industrial and energy policies have recently become more audible, and, in the wake of the failed first attempt to ratify the European constitution, they may have the potential to perpetuate themselves. The Commission’s President JosÃ© Manuel Barroso seems to have accepted this rather bleak version of the future of European institutional integration, while his predecessor, Romano Prodi, who is now trying to remove Silvio Berlusconi from power in Italy, allegedly already vowed to block future French takeover bids if he wins election in April.
“We have to be realistic,” Barroso said in a recent interview. “Now
Europe will be projects based. We will be results based.”
But for all the political posturing, things are hardly as bleak as they sound – the French government, for example, has always had a rather special attitude with respect to its influence on the nation’s most important corporations, as a consequence of both the way French political and industrial elites were/are formed and, I think, the perceived (much less real) extraordinary success of the French “dirigisme” – a system of state guided economic development that was in place during the French post war economic miracle – les trentes glorieuses. Even when the Conservatives started their heavily politicized re-privatisation programme (which followed the initial nationalisation of the first Mitterand presidency) they did so not by trusting the markets more than absolutely necessary, instead creating “stable knots” they knew they could count on.
But Europe prevailed – Mitterand’s attempt to create communism in one country died as quickly as it was conceived: it weakened France in Europe. And, slowly, very slowly, even politicians in France have Europeanised their attitudes, and slowly, very slowly, even opened their regulated markets.
But still, I’m not sure I would go as far as Daniel Gros, director of the Center for European Policy Studies in Brussels, who is quoted in the article saying that the rise in nationalist rethoric is inevitable, temporary and, in the end, harmless –
“[The] progress [of the single market], he said, has made Europe’s economies ripe for cross-border mergers. Political resistance to this is both inevitable and temporary, he said. ‘Ten years ago a takeover bid for an energy company would have been unthinkable – they were all monopolies,’ Gros said. “We have come a long way and what we’re seeing now is a perfect dÃ©jÃ vu. It will blow over.”
The timing is bad, and while agreeing with Mr Gros that the storm will blow over, there might be some collateral damage that will be costly to repair. Someone always has to pay a price when politicians feel they’re losing power…