France’s finance minister expressed his disappointment at a recent EU decision to block a major rail merger, calling for competition rules to be changed to enable European firms to become stronger on the global stage.
“Let’s have a look at reality — we are facing a huge challenge with the rise of the Chinese industry. What do we do — shall we divide the European forces, or try to merge the European forces from the industrial point of view?” Bruno Le Maire told CNBC’s Hadley Gamble at the World Government Summit in Dubai on Sunday.
His comments come after the European Union blocked a rail deal between Alstom and Siemens on Wednesday, citing competition concerns. The merger proposal between the French and the German companies planned to create a European rail champion with revenues of about 15 billion euros ($17 billion). The merger proposal referred only to the companies’ transport services and would have combined them into one new firm, solely controlled by Siemens.
The EU’s competition authority specified that the proposed merger would have created an “undisputed” market leader in several mainline signaling markets, as well as reducing the number of suppliers by removing one of the two largest manufacturers of very high-speed rolling stock.
Both the German and French governments had supported the merger, believing the deal would’ve been a good counter to the economic rise of China.
“I think it was a mistake from the EU commission to refuse that merger between Alstom and Siemens,” Le Maire added.