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Last Legs?
"There is no European public opinion, rather national public opinions," said Poland's president Lech Kaczynski at a conference in Germany this week.
Nowhere is Kaczynski's observation truer than in attitudes to trade and business - an area that has been much in the news in recent weeks. Yesterday, EU trade commissioner Charlie McCreevy warned that state intervention to prevent takeovers of companies were illegal, out of date and anti-competitive. He was responding to the growing trend for "economic nationalism" in Europe, where governments exercise influence and bend laws to ensure large companies and certain key industries, from defence to yoghurt manufacturing, remain in the ownership of nationals.
France, the major if not the only villain of the piece, didn't comment. Prime minister Dominique de Villepin has designated eleven key industries for protection, and machinated a deal to prevent an Italian firm from buying into the French energy market.
France's antics have lent credibility to other capitals keen to protect what they see as their national champions against foreign takeover: Spain, Italy and Poland have all moved to defend businesses, in what the International Monetary Fund's chief economist has described a new threat to cooperation between countries:" multilateralism (is) in retreat everywhere", said Raghuram Rajan.
Furthermore, Britain felt the chilly end of its European "partners'" abuse of free trade agreements this winter, when Dutch and German governments hoarded gas supplies that were supposed to pass through the Interconnection Pipeline via Belgium to the UK, reducing British supplies to a trickle.
Bizarrely, Britain is one of the few remaining EU countries with an open and positive attitude to globalisation and foreign takeover.
The Economist is, predictably, witheringly critical of European governments' attempts to hold back economic reality. However, it argues that the high profile cases detract from the general picture, which is brighter in the EU at least: Mergers are up and "The need for capital and new markets is pushing companies across borders faster than governments can put up obstacles to them."
The Business argues a bleaker alternative. Free trade, it argues, is on "life support" in continental EU capitals. The "toothless" takeover directive, which the Economist sees as a success, looks like having no effect on cross-border takeovers.
French businesses have exploited globalisation successfully: They made tough choices, trimmed down and are now among the world's most powerful players. The same, sadly, is not true of the French state and establishment, which is aghast by globalisation:
"The old structures it knew, understood and controlled were eroding; it was becoming harder for the traditional old boy networks to operate. But it was not just the enarques (the graduates of France’s elite civil service school), that resented the changes; ordinary voters, who are fed constant anti-market and pro-socialist propaganda in schools, universities, newspapers and on broadcast media, also do not like what is happening. They are right, of course, to be angry about high unemployment, the cost of welfare dependency and the lack of opportunity for young people; needless to say, however, they turned their anger to the wrong targets – business and supposedly ultra-liberal economic policies – rather than flawed social-democratic policies of the politicians."
The EU constitution referendum was a turning point. The Business argues that among other things, the vote in France was widely seen as a "referendum on globalisation." Stung by the defeat, French ministers responded by turning France's back on the outside world.
The Business leaves it there, but warns that Europe could fade away if economic nationalism takes a stronger hold. Indeed, an Italian cabinet minister declared "Europe is dead" following France's blocking of the Suez takeover deal.
What it doesn't discuss is the huge support for economic nationalism among European citizens. Over two-thirds of French voters are said to support de Villepin's strategy - and, embattled over working contracts among other things, he is not in a mood to isolate himself further. Feelings against the EU's "interference" in French affairs is running high - a directive from Brussels, or a court ruling against the government could push things even closer to the edge. Italian politicians, left and right, are pleasing voters by threatening to block any French-led takeovers in retaliation.
Kaczynski is right - and wrong. There may be a phenomenon of a Europe-wide public opinion. The only trouble for Eurocrats is that opinion seems to be "My country first - and never trust the other lot."
