On July 4, 2019, France and Germany, joined by Poland, issued a joint call to modernize European competition rules (“Joint Statement”).[1] This follows the publication in February 2019 of a Franco-German Manifesto for a European industrial policy to foster the creation of European champions.[2] The Joint Statement scales back some of the Manifesto’s far-reaching ideas.

The Manifesto was published during the final stages of the Commission’s investigation into the Siemens/Alstom merger.[3] The Commission’s subsequent prohibition of the deal was strongly criticized by the French and German governments: the French Minister for the Economy said the decision was a “political mistake,”[4] while his German counterpart called for the creation of “strong European champions”[5] to compete with China. While acknowledging that merger control rules are essential, the Franco-German Manifesto proposed three fundamental changes: (i) taking into account government control and subsidies of competing suppliers; (ii) assessing competition at global level and extending the timeframe for assessing potential future competition; and (iii) giving the EU Council a veto to override the Commission’s decisions in certain (undefined) cases. The publication of the Manifesto was met with widespread skepticism from competition law experts, national antitrust authorities, and European industrial economists, who criticized the attempted politicization of the rules-based merger review system.

The Joint Statement signals a retreat from the hard line of the original Manifesto. The proposal to give politicians a veto over the Commission merger decisions is replaced by a more muted call to reinforce the role of national ministries in the merger control process through increased engagement of the Competitiveness Council and, at a technical level, the Advisory Committee. The new document seeks to integrate elements of industrial policy into existing competition rules by merely encouraging the Commission to take into account “the overall trade and industrial policy approach of third countries,” including State interference in, and subsidization of, certain companies or industries.

[1]      Joint Statement by the Ministries of the Economy of France, Germany and Poland, “Modernising EU Competition Policy,” July 4, 2019.

[2]      Joint Statement by the Ministries of the Economy of France and Germany, “A Franco-German Manifesto for a European industrial policy fit for the 21st Century,” February 19, 2019.

[3]      Siemens/Alstom (Case COMP/M.8677), Commission decision of February 6, 2019.

[4]      See Financial Times, EU blocks Siemens-Alstom rail merger, Le Maire says, February 6, 2019.

[5]      See EurActiv, German 2030 industrial strategy: Altmaier backs ‘European Champions,’ February 7, 2019.