Sarkozy vows to back Alstom

16th April 2004, Comments 0 comments

LA ROCHELLE, France, April 16 (AFP) - French Finance Minister Nicolas Sarkozy pledged Friday not to let struggling French heavy-engineering group Alstom collapse and backed France's longstanding policy of so-called national champions.

LA ROCHELLE, France, April 16 (AFP) - French Finance Minister Nicolas Sarkozy pledged Friday not to let struggling French heavy-engineering group Alstom collapse and backed France's longstanding policy of so-called national champions.

"Alstom is one of the pillars of industry that we are not going to let fall and for which solutions need to be found," Sarkozy said here shortly before visiting an Alstom factory.

"France needs industry and it needs to be taken care of right away because France is not going to become an economy devoted soley to services," he added.

Faced with bankruptcy, Alstom was rescued last September by a EUR 3.2-billion (USD 3.8-billion) package backed by the French state and foreign and domestic banks, but only after an initial plan was rejected by European competition authorities.

EU regulators are still studying whether the current plan does not breech antitrust rules. Sources in Brussels said Friday that a decision would come after mid May.

The current plan could see EUR 2 billion in state aid over the short, mid and long term as well as EUR 2.275 billion in guarantees covering 65 percent of banking loans worth EUR 3.5 billion.

Alstom, which has interests in transport, energy infrastructure and shipbuilding, shed 17,000 jobs in 2003 and is to eliminate 10 percent of its 60,000-strong workforce by the end of this year.

Alstom's troubles come amid a raging debate in France about the general decline of French industry as manufacturing activities are being driven abroad by high domestic wages and general growth of the service sector.

Upholding a long-standing French tradition in economic policy, Sarkozy said that France should seek national champions in key industries.

"France needs to keep four, five or six strategic industrial sectors," he said adding that Alstom should be one pole in the energy and transport infrastructure industries.

© AFP                                                   

                                                         Subject: French news

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