Hollande v Mittal: is France sending business to guillotine?
Row between Socialist government and Indian tycoon resurrects fears of widespread French nationalisation
THE SOCIALIST government of President Francois Hollande is under fire after Industry Minister Arnaud Montebourg (above right) said the steel company ArcelorMittal, owned by the British-based Indian tycoon Lakshmi Mittal (above left), was not welcome in France.
At issue are two blast furnaces at a plant in Florange in the industrial Lorraine region. ArcelorMittal wants to close them with the loss of 629 jobs. Montebourg has threatened to temporarily nationalise the disputed plant rather than allow a closure.
Hollande has said the jobs must be saved and says he has two buyers for the Florange plant, although he will not name the potential ‘White Knights'. The president met with Mittal for talks at the Elysee Palace yesterday, but neither would reveal details of negotiations.
The row has resurrected the old stereotypes of French Socialists seizing private companies.
London mayor Boris Johnson, who is currently touring India, urged the subcontinent's tycoons to avoid being put in "tumbrils" by the French and set up in the UK capital instead.
"On a day when the sans culottes appear to have captured the government in Paris and a French minister has been so eccentric as to call for a massive Indian investor to depart from France, I have no hesitation or embarrassment in saying to everyone here, Venez a Londres, mes amis - come to the business capital of the world".
The Daily Telegraph's Ambrose Evans-Pritchard says the row is a throwback to France's last great wave of nationalisation 30 years ago when President Francois Mitterand seized the banks, arms makers and steel industry. He explains that Mittal's reasons for closing the blast furnaces and keeping the rolled steel operations at Florange are perfectly reasonable.
"The episode has once again exposed the anti-market reflexes of a government that seems out of step with Europe and the world, and still unable to face up to the causes of France's slow national decline," concludes Evans-Pritchard. "What France needs as the economy slides deeper into perma-slump is a radical assault on the state. Instead, Mr Hollande talks of nationalisation. Is London big enough to take the refugees?"
The Financial Times concedes that the controversy has reignited claims that Hollande is hostile towards business, but notes that it is not only the Left that is guilty of such behaviour. Former centre-right president Nicolas Sarkozy also clashed with Mittal over French closures, including Florange.
The Wall Street Journal says the affair is "the first concrete illustration of an idea Mr Hollande had toyed with during the presidential campaign". The proposal, "although vague", was to force companies that planned to shut down operations to first seek a buyer, even if that meant turning to a competitor.
The paper points out that ArcelorMittal is in trouble, having suffered credit downgrades from all three of the world's biggest ratings agencies since the summer, over the company's ability to service its $23 billion in net debt. Two of them have rated ArcelorMittal at junk status. The suggestion is that it can ill-afford to keep open two blast furnaces that have been idle for a year anyway because of a decline in demand for steel.