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France slams EU veto of Alstom-Siemens rail merger

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Staff Writer | Wednesday February 6, 2019 6:05AM ET
Bruno Le Maire
Europe   Finance Minister Bruno Le Maire

France’s government said that an expected European Union veto of a plan to merge French and German rail companies Alstom and Siemens into one industry giant was a mistake that would give China the edge on the world market.


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French Finance Minister Bruno Le Maire acknowledged a veto was likely and called it “an economic mistake” that “will serve the interests of China”.

France’s government had lobbied for the merger as a defence to compete against China’s state-backed CRRC, will Le Maire saying before a meeting with Vestager last month that merging the companies was “the best response to China’s growing importance in the railway sector. And the only one.”

Brussels believes the proposed merged company would be in a commanding position for selling high-speed trains and rail signalling, crushing smaller groups and hiking prices for national rail companies.

Competition authorities in Britain, the Netherlands, Belgium and Spain have all backed Vestager, out of concern for increased costs for their national railways.

Backers of the merger hoped Brussels would look beyond the EU and its member states and consider the rise of CRRC, which was itself born of a merger of Chinese companies.

“European competition rules need to be revised,” Le Maire said. “In the weeks to come, my German counterpart Peter Altmaier and I are going to make proposals aiming towards a much more ambitious industry policy.

“I hope we will consider that the pertinent market for analysing competition is the world market and not the European market.”

The proposed company was to create an industry giant with operations in 60 countries and an annual turnover estimated at 15.6 billion euros.

 

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