The Maginot Line

I can’t help feeling that no sooner do I lift someone up than I find I have to knock him down again. I ended the last post offering a best case scenario excuse for Jacques Chirac, but now another topic lands on my in-tray: France and strategic industries.

Regular readers will remember that just before the summer break we had a lengthy debate about whether yoghurt was a strategic industry in the French case. Well here it comes back again, since EU observer is reporting that French industry minister Francois Loos is proposing to establish a list of industry sectors in which the rench government would restrict takeovers of key companies by foreign bidders. (Tim Worstall is also onto the story here, and Reuters has a good summary of what we know so far here).

A Commission spokesman has said “Whatever they do politically, clearly I have full confidence in the fact that they are going to stick to the European Union rules which are governing economic business in the European Union”. I couldn’t put it better myself. We should all have confidence that the French government are going to stick by the rules, since, lets be clear, this isn’t a simple issue of weights and measures, and not playing by the rules would be a serious issue.

Incidentally, for future reference, and for all those leagle-eagles out there, here, courtesy of Euractiv is a link to the European Parliament 2004 directive on takeover bids.

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

4 thoughts on “The Maginot Line

  1. I think another Frenchman, Bastiat, had it about right when it came to “strategic” industries: while preserving an industry protects a nation against shortages in the event of war, making the nations interdependent through trade protects the nations against war itself.

  2. Bastiat is an inspirational icon for all Europeans but sadly much neglected. Economic policy debates are notably short on satire but his petition on behalf of the candlemakers c. 1846 to France’s national assembleby is an immortal exception:

  3. Well – quite frankly, you should have known better than to make excuses for Chirac in the first place. I recall a nice speech he made to radio d’outre mer a few months back explaining why these departments should vote for the Constitution.

    His argument boiled down to :

    – this constitution gives the dom – toms special status as ‘peripheral regions’ with ‘permanent geographical handicaps’

    – this means you will get more subsidies (well – we have to even out handicaps) and these will be cast in stone – (well the handicaps are permanent …)

    – this is almost an exclusively french issue, so look how good a deal this is, and look how well we have done to get this into the draft constitution

    – so vote for the constitution

    Very communautaire, don’t you think? What’s worse, it’s all true. The Treaty WOULD have done this. And the French would have got their extra piece of Brussels pork. I would take any pronouncement from Chirac about Community interests with a handful, not a pinch, of salt.

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