France Nationalizes Shipyard to Thwart Italian Majority

 

As France's most avowedly pro-business leader in decades, few would have predicted the former investment banker's first big move in the corporate sector would be a nationalisation.

 

However, his action fits with the interventionist style of other postwar French leaders. It also crosses into the defence sector, where many national governments prefer to wield influence over ownership.

 

The Italian state-owned shipbuilder Fincantieri rejected a French offer this week of 50-50 ownership of the shipyard, which is being sold because of the collapse of its South Korean parent, STX.

 

That prompted the French state, which had a minority stake, to exercise pre-emption rights to buy out other shareholders before those rights expire at the end of the month, in effect giving Paris more time to come up with another solution.

 

"This decision is line with the economic strategy that we want to build with the president of the Republic and the prime minister," Economy Minister Bruno Le Maire told a news conference.

 

"We want to free up France's exceptional productive capacities and protect our strategic interests," Le Maire said, adding that the 50-50 ownership offer was still on the table and that he would visit Rome early next week.

 

Fincantieri agreed in May to pay 79.5 million euros ($93.20 million) for two-thirds of STX France.

 

France's threat to nationalise the shipyard, which mainly makes huge luxury ocean liners, infuriated the Italians, with one minister and Fincantieri's CEO questioning Paris's commitment to a united Europe.

 

The bid has raised fears in France about jobs at the Saint-Nazaire site, and the French government is also concerned about the strategic importance of the yard, the only one in France big enough to build aircraft carriers and other large warships.

 

"The Saint-Nazaire shipyards are not destined to remain under state control," Le Maire said. "The pre-emption decision is temporary and should give us the time to negotiate in the best conditions."

 

The decision flies in the face of any expectations that Macron, who in his former post as economy minister sought to liberalise swathes of the economy, would break with the French state's tradition of intervention in business.

 

Even while economy minister, Macron forced through a shareholder vote that increased the government's power over carmaker Renault, falling out with its boss in the process.

 

Since becoming president in May, he has also forced carmakers to help fund a failing parts manufacturer.

 

Macron was elected on promises to boost growth by lifting constraints on business, and his government has flagged plans to privatise non-strategic state holdings while easing labour regulations.