An Alstom's train
8 February 2019

The European Commission's decision on the Alstom-Siemens merger throws the need to revise competition law into sharp focus

On 6 February Bruno Le Maire, Minister of Economy and Finance, confirmed the European Commission's expected prohibition of the planned merger between French rail group Alstom and the German group Siemens.

The Alstom-Siemens merger was aimed at creating a European champion in the rail sector capable of rivalling the international competition – not least from China. These plans had the full backing of the French and German governments.

The need to revise competition law

The Government does not cast doubt over the competition rules in force within the European Union, which enable "a level playing field" for everyone, Agnès Pannier-Runacher, Minister of State, attached to the Minister of Economy and Finance, maintained. But "these rules, as they are currently applied, hold us back" compared with our global competitors, she insisted, citing the case of China's CRRC, the global rail leader.

As such, reform of European competition law has now become necessary. "Competition law is outdated and needs to be revised; this will be tabled during the European elections" in May, the Government's spokesman, Benjamin Griveaux, said after the Council of Ministers' meeting. "The EU must be a place where our employees and our economic interests are protected".

The German Minister of Economy pledged a Franco-German initiative for reforming the European competition rules and standing up to China.

Other possibilities for bolstering Alstom's position

Other than perhaps challenging this rejection, which has "not been decided on" according to Benjamin Griveaux, the Government intends to consider other possibilities for bolstering Alstom's position.

"This flagship French company has all the ingredients to succeed, its position just needs to be shored up," Bruno Le Maire told the Senate.