French President Emmanuel Macron has made his first major intervention in the corporate world by nationalising a shipyard to stop it falling into Italian hands.
In a move that shows the limits of the new government’s economic liberalism, the finance ministry on Thursday said the state was exercising its pre-emption right to buy out all the shareholders in STX France.
Bruno Le Maire, the economy minister, said that the decisions had a “single objective”, which was to “defend France’s strategic interests in shipbuilding” and guarantee that jobs remain in the country.
Italian state-owned shipbuilder Fincantieri earlier this year struck a preliminary deal to buy two-thirds of STX France, based in Saint-Nazaire on the French Atlantic coast, which is being sold following the collapse of South Korean parent STX last year.
Mr Macron subsequently expressed concern about the deal, agreed by the previous government. On Wednesday Mr Macron threatened to nationalise the whole company unless the Italians agreed to a 50/50 ownership split.
The government is worried about job cuts at the company, which employs more than 2,500 people, and also security issues. The shipyard is the only one in France with facilities large enough to build aircraft carriers.
The Italians declined the offer of a 50/50 split this week, with the Italian economy minister saying that Mr Macron was failing to live up to the “pro-Europeanism and liberal values” he espoused in his presidential campaign.
Mr Macron discussed STX in a telephone call with Paolo Gentiloni, Italy’s prime minister, on Thursday, but senior Italian officials were furious.
“Nationalism and protectionism are not acceptable ways to regulate relations between two great European countries. For shared projects one needs trust and mutual respect,” Pier Carlo Padoan, Italy’s finance minister, and Carlo Calenda, Italy’s economic development minister, said in a joint statement.
Mr Le Maire on Thursday said that the site was not going to stay under state control, and the government’s move would enable them to negotiate with buyers from a position of strength. Mr Le Maire said they would continue talking to the Italians.
“”The Saint-Nazaire shipyards are not destined to remain under state control,” he said, adding he would visit Rome next week. “The pre-emption decision is temporary and should give us the time to negotiate in the best conditions.”
Mr Macron, although elected on a liberal and pro-business platform, has throughout his career never been afraid to use the power of the French state to intervene in the corporate world.
When he was economy minister for the previous Socialist government, Mr Macron delayed the sale of French video start-up Dailymotion to a Hong-Kong company, securing a successful last-minute bid from Vivendi. He also built up a stake in carmaker Renault through the use of derivatives contracts.
In the case of STX, one cruise industry executive, however, said Paris was concerned about technology transfer to the Chinese with the Italian deal, since Fincantieri has launched a joint shipbuilding project in China this year. But Italian officials dismissed this as a red herring, saying the co-operation with the Chinese was limited and there would be ways to mitigate the risk of any loss of intellectual property.
Italian commentators were also heavily critical of Mr Macron’s decision. “Shipbuilding is a sector in which Europe is a world leader and there is a need for consolidation: it’s stupid to make everything fall apart because it’s not the French but the Italians in the lead,” said Andrea Goldstein, chief economist at Nomisma, a research firm in Bologna.
“The more weeks go by, the more Macronism is showing an old face, it’s the usual France with its protectionist, sovereignist, statist, dirigiste instincts,” wrote Adriana Cerrettelli, in an editorial in Il Sole 24 Ore.
The nationalisation move comes as Mr Macron is facing falling approval ratings at home — an opinion poll over the weekend showed the second-biggest decline in popularity for a French president so soon after an election.
His approval ratings fell 10 percentage points to 54 per cent this month, according to pollster Ifop. Only Jacques Chirac in 1995 lost so much ground in such a short time after being elected.
