Janus-faced French approach to business

Call it protectionist if you will, but the French prefer to say it’s just a case of heartfelt patriotism. Yet when a French company takes over a foreign one, the first thing it does is appoint a manager with a French passport. There is a joke going around among members of the European Commission in Brussels: “If a Frenchman buys a foreign product, two months later he’ll be saying that it’s French”. The joke is a reference to the wave of neoprotectionism masked as patriotism that was introduced by former President Nicolas Sarkozy, and has been continuing under the current administration of François Hollande. A 2014 interview inLe Mondecaused an uproar when the minister of industrial renewal, Arnaud Montebourg, spoke in no uncertain terms about the attitude of the French government towards mergers and acquisitions. Referring to General Electric’s takeover of the French company Alstom, Monteburg said, “The choice we have made, along with the prime minister, is one of economic patriotism”. Speaking in a blunt and sincere manner, he added: “These measures to protect strategic French interests represent a way of reclaiming our power. We can now block sales and demand quid pro quos. It is a fundamental rearmament of public power. France cannot settle for discussions while other states act”. And so it goes: with the Montebourg decree, Paris can safeguard French national interests.

Montebourg is no longer minister of industrial renewal, but under his successor, Emmanuel Macron, not much has changed. If a foreign company is interested in French assets, shares in a company controlled by the state or the outright acquisition of a branch of a company, the Élysée can have its say. According to government sources, every dossier is subjected to examination by Hollande’s cabinet. If the operation does not satisfy the Élysée’s requirements – which are not made publicly known – the transaction is prevented from moving forward. There is a limit to this practice that enables Hollande to avoid antagonizing the European Commission: economic patriotism only comes into force when a non- French company wants to acquire at least 33.33% of a French firm. Nevertheless, the fact that Paris has decided to block foreign access to a large number of sectors is a problem.