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Is "economic patriotism" -- the expression coined by Dominique de Villepin, France's prime minister, and epitomised by the proposed merger of Gaz de France and Suez -- a sign of hard-headed pragmatism gaining ground in Europe? Or is it an example of French schizophrenia towards globalisation, if not the European Union (EU)?
The idea of creating giants "in a world where fossil energy is increasingly rare, and where only size counts" -- to quote Thierry Breton, economy and finance minister -- makes sense. But if the primary logic is size and pure economic rationality in a global market, the planned offer by Italy's Enel for Suez made sense too -- as does, in all honesty, Mittal's bid to absorb Arcelor, the steelmaker. The introduction of patriotic criteria confuses the debate. Could French giants be good for Europe, but European giants bad for France? That is a hard motto to sell.
How can you invoke the need to create a "Europe of energy" -- to demonstrate to EU citizens that they badly need Europe in a world characterised by unpredictability -- and at the same time sound the trumpets of patriotism when some of your "family jewels" are about to be seized by others in perfect capitalist logic?
To understand the rationale of France's move one must combine at least three elements. The first is what English speakers would describe as the "old boy network". The chief executives of Suez and GdF came from the same elite schools, started their careers as civil servants and could plot their move with the highest authorities.
The second is that, for many in the French elite, to resist Italians today, or Indians for that matter, is a proof that they are doing the right thing. How can you compare the seriousness of la Grande Nation with her responsible and functioning state with the commedia del arte status of her transalpine junior partner? The superiority complex of the French combined with something of an inferiority complex on the Italian side was a recipe for disaster. In France, the economic centrality of the state is not perceived as an anachronism in a global economy but an application of Adam Smith's law of comparative advantage. France has a strong state compared with most European countries, so why not use the state in the service of the country's ultimate economic interests?
The third element is more tactical and political -- shrewd in French terms but probably very negative for its European consequences. It is to use the need to counter Enel's "Italian offensive" on Suez as the perfect opportunity to privatise GdF. Of course, the trade union response was extremely negative: it makes little difference whether you are laid off by a French giant or a European one. The French move may have been well executed but it is also a perfect symbol of the decline of EU logic. In the past, governments used Brussels to pass unpopular but necessary reforms. "We would have loved to do otherwise, but we cannot escape it. We have to follow the European rules," was the convenient logic. Today, France seems to be hiding behind patriotic logic to implement, in spite of past commitments, a privatisation of a major public service company. In other words, sacrifices can be made in the name of France, but no longer in the name of Europe.
Could the European ideal be confronted with the same fate as communist ideology in the Soviet Union, moving from faith to dogma and from dogma to irrelevance? The casualty of France's move is above all Europe. The French merger makes sense economically, but so did Enel's. Small step by small step, European governments from Paris to Warsaw seem to be engaged in a process that could only be described as the "undoing" of Europe. Europe is falling between national political calculus on the one hand and the economic logic of a world market for energy on the other.
But does France deserve the somewhat furious criticism it receives, or is it treated more harshly than other European countries that are behaving not better but only more discreetly? Is France singled out more for its style than its actions, because of its presumed arrogance more than its objective performance?
Mr de Villepin's flamboyant presence is part of the problem. If you make a brilliant move, you should be discreet about it and not show off how central the state is to the development of French capitalism. But beyond style lies another, more troubling reality. France today is more popular in non-western countries than in Europe, where one is witnessing a process of isolation, if not self-isolation, to which this latest development contributes. (The writer is a senior adviser at France's Institute for International Relations.)
Under syndication arrangement with FE
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