Four major Member States of the European Union are demanding changes to the bloc's unduly strict rules on mergers and acquisitions (M&As) and consolidations to allow their multinational corporations to better compete against peer rivals from the United States and China.
France, Germany, Italy and Poland are urging immediate action on their demand for competition rule reforms. Their unusual confrontational attitude is directed against Margrethe Vestager, the European Commissioner for Competition and Executive Vice President of the European Commission for a Europe Fit for the Digital Age.
The four EU heavyweights want Vestager to stop dragging her feet on competition law reforms they insist are needed to build European champions to rival China and the U.S. They're also apparently miffed at Vestager saying in late January the process to change the EU's M&A rules will "take some time."
In their letter to Vestager dated February 4, the economy ministers of the four countries argued the "Commission should also provide greater clarity on the efficiencies brought about by a merger and on the evaluation of the competitiveness industry in the appraisal of mergers: specific guidelines, drafted in the forthcoming weeks, could develop the range of efficiencies taken into account in the competitive analysis."
A year ago, the European Commission, which oversees competition rules in the 27-member bloc, rejected a merger between French rail giant Alstom S.A. and Germany's Siemens AG (the largest manufacturing company in Europe). Alstom and Siemens said the merger would have created a European rail giant with revenues of $16.5 billion (€15 billion). The commission, which Vestager heads, said the merger had "serious competition concerns." Vestager's rejection of the multi-billion euro merger ostensibly to protect consumers left France and Germany incensed and led to their calling for changes to allow more consolidation.
"The nature of global competition has changed. European companies now have to compete with foreign companies that sometimes benefit from substantial state support or from protected domestic markets, in some instances to a very high degree," said the letter. "We therefore call on the Commission to propose a revised version of the guidelines of merger control."
German Economy Minister Peter Altmaier, France's Bruno Le Maire, Italy's Stefano Patuanelli and Poland's Jadwiga Emilewicz signed the letter.
The ministers, however, are confident Vestager's "involvement in long-term strategy for the future of European industry would lead to greater collegiality in the assessment of the EU's long-term industrial challenges in the evaluation of competition rules, merger control and state aid rules."
The four member countries specifically target measures they know Vestager can finalize herself. Analysts said this move is a more pragmatic tactic compared to their original calls to change Europe's competition rules. This would have included plans to change treaties and regulations requiring unanimity among the member countries.
