France guilty of protectionism: EU watchdog

15th September 2005, Comments 0 comments

LONDON, Sept 14 (AFP) - Europe cannot afford to stand by while countries such as France rule strategic sectors off limits to foreign takeovers, EU competition commissioner Neelie Kroes said Wednesday.

LONDON, Sept 14 (AFP) - Europe cannot afford to stand by while countries such as France rule strategic sectors off limits to foreign takeovers, EU competition commissioner Neelie Kroes said Wednesday.

"We can't afford to be complacent when faced with the current resurgence of protectionist rhetoric... the risk is both serious and pressing," Kroes told a conference in London.

"Confronted by insecurity and a collective loss of confidence, some in politics are quick to seek easy gains by advocating inward and regressive policies," Kroes said.

The Dutch commissioner was critical of attempts "to protect champions and national brands, even European, from the effects of the world market" and of the urge to spend public funds "to relaunch lame ducks of industry".

The commissioner's criticism at the Liberal Democrat City Forum in London was a thinly veiled attack on the French government, which late last month announced its intentions to fence off 10 sectors from foreign control.

During a meeting on Monday with French prime minister Dominique de Villepin, Kroes called on his government to respect EU competition regulations, a spokesman from the minister's office told AFP.

On August 31, industry minister François Loos announced France would pass legislation by decree to block mergers or takeovers in the sectors of biotechnology, pharmaceuticals, armaments, casinos, communication interception equipment, computer security systems, dual civil-military technologies, cryptology equipment, and businesses dealing with sensitive military information.

While the EU's Treaty of Rome stops member states blocking the free circulation of goods, economists noted that many of the sectors were already eligible for protectionist measures as they were linked to national security.

The announcement came against a background of rumours that national icons such as food giant Danone and mining group Eramet were being stalked respectively by American PepsiCo and Brazil's Vale do Rio Doce.

Suggestions that PepsiCo was contemplating a hostile bid for Danone triggered a patriotic uproar in French political circles and vows to keep the company in French hands.

De Villepin called for a commitment to "true economic patriotism" while President Jacques Chirac asked the government to "strengthen measures to protect our strategic enterprises".

Copyright AFP

Subject: French news

 

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