Germany, France agree industrial policy plan for Europe

By Michael Nienaber

BERLIN (Reuters) - France and Germany on Tuesday agreed a joint plan for industrial policy in Europe, aiming to support local companies to compete with foreign rivals and better protect key technologies from overseas takeovers.

The move is driven by concerns about foreign - particularly Chinese - companies acquiring European know-how and eroding the manufacturing base on which much of the continent's wealth is built.

The proposals, presented by German Economy Minister Peter Altmaier and his French counterpart Bruno Le Maire after talks in Berlin, call for more investment in innovative technologies and an overhaul of the European Union's competition rules.

 

"Europe will only remain a great industrial continent if we're able to join forces, change European rules that are now outdated and better protect ourselves," Le Maire said.

In their five-page strategy paper, France and Germany proposed giving the European Council, the forum representing European Union governments, the right to override some antitrust decisions by the European Commission in certain "well-defined cases".

Berlin and Paris want to overhaul EU merger rules following the European Commission's veto of efforts by Siemens and Alstom to create a European rail champion to compete with larger foreign rivals.

The two European countries suggested updating merger guidelines to take greater account of competition at the global level rather than at the European level.

"It's the first time that France and Germany have put forward proposals to transform EU competition rules," Le Maire said. "We have powerful, modern technologies and we don't want them to serve other continents than ours."

Le Maire also said France and Germany hoped to get European Commission state aid approval for a new joint battery initiative before April 1. Altmaier said Germany and France had earmarked a combined 1.7 billion euros to support the local production of battery cells for electric vehicles.

"I expect a decision about the consortia very soon, probably in the coming weeks," Altmaier said.

The push is meant to reduce the dependence of European carmakers on Asian electric vehicle (EV) battery suppliers and protect local jobs at risk from the shift away from combustion engines.

Altmaier's decision to actively shape industrial policy marks a clear break with Germany's traditional "hands off" approach to business and market decisions.

(Reporting by Michael Nienaber in Berlin; additional reporting by Michel Rose and Richard Lough in Paris; editing by Thomas Seythal and Janet Lawrence)