Paris furiously answered to the European Commission’s veto to the merger of German industrial group Siemens and French railmaker Alstom by calling for the creation of “European industrial champions”. But this proposal, which would boost national leaders’ powers at the expense of the European Commission, could cripple the transparency of the European Union’s merger control system. Competition lawyer Nicholas Levy at Cleary Gottlieb said the French proposal would “fundamentally change the architecture of European merger control, replacing expert analysis conducted within a well defined legal framework with political decision-making.”
He added: “The Commission’s role would be relegated and the transparency that has characterised EU merger control for 30 years would be upended.
“It is difficult to see how this would lead to better decision-making and more competitive markets.”
Last week, Brussels blocked the Franco-German merger arguing the result would be overly dominant in the European market in signalling and high speed trains.
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But Paris rejected the EU’s view on the merger, claiming the current rules are exposing the continent to the technological supremacy of China.
And in response to the veto, French economy minister Bruno Le Maire put forward a three-point plan.
Under his proposals, presented in Brussels alongside his German counterpart Olaf Scholz, EU national leaders would have the right to overturn the decisions over mergers by the European Commission.
Mr Le Maire said: “Instead of blocking the creation of an industrial champion upfront, we would make a dynamic, rather than a static analysis.
“If there is a problem, the decision can evolve.”
Another proposal put forward by the Elysee, would make Brussels “more systematic” in evaluating competition risks based on companies’ market share at a global level.
At the moment, Brussels decides on a case-by-case basis the “market definition” that should be used to assess the threats posed by mergers.
Mr Scholz didn’t openly back Mr Le Maire’s proposal, but said Germany wanted it to be easier “to do the necessary spots if you want to build world champions”.
The European Commission commented the French plan saying: “We always stand ready to discuss with member states the proposals they may have.”