French Takeover Law

The French are very touchy about their national treasures, their industrial champions and they hate the idea of them falling into enemy hands. So they passed a law to protect them. Brussels is not pleased.

The European Commission said on Tuesday that it would scrutinise a new French decree that protects certain industries from foreign takeover and warned it could “react” if the provisions were found to violate European Union law.

The law is a poison pill to stop takeovers in certain sectors. It also has another wonderfully economic illiterate aim.

The decree could also give France a weapon in its fight against the outsourcing of jobs. It allows the government to stop foreign owners of French registered companies transferring production abroad, if they are in any of the protected sectors.

France was already a country where no rational person would wish to invest. I’m sure that making life even more difficult for investors will go a long way to solving the unemployment problem. In this case Brussels is fighting on the side of rationality. However the unpleasant truth is that many of the members of the EU share France’s economic ignorance and are determined to force us down the same stupid path.