France to Nationalize Steel Producers

France to Nationalize Steel Producers

The French government, having eschewed socialist takeovers since French President François Mitterrand seized the banks, insurance groups, arms makers and steel industry some thirty years ago, is now considering seizing ArcelorMittal’s steel operations in the Lorraine plateau. France’s minister of industrial renewal, Arnaud Montebourg, is threatening a “temporary public takeover” of the huge steel operation, saying “we don’t want Mittal in France anymore.” The Arcelor mills have been the hub of France’s steel industry for 200 years.

Lakshmi Mittal, a Hindu who was born in a Rajput village in India that had no electricity, bought the Franco-European steel champion Arcelor in 2006. The French were furious that an outsider had taken over Arcelor; the French secret services tried to sabotage the takeover, even tapping Mittal’s phones. President Jacques Chirac went so far as to threaten to invoke the “national security” clause that existed under EU competition law to block Mittal’sd acquisition of the company. Even Arcelor’s chief, Guy Dolle, snidely commented that Arcelor distilled perfume while Mr Mittal turned out cheap eau de Cologne.

The French move to instigate a takeover elicited this response from Boris Johnson, mayor of London:

The sans-culottes appear to have captured the government in Paris. I have no hesitation in saying here, Venez à Londres, mes amis. Don’t wait to be persecuted … and put in the tumbrils by the regime. Come to London.

While more than 40 French members of parliament on Tuesday accused Mittal of serial violations, including closing operations in Florange and a reluctance to invest enough in the Florange site near Metz. They say Mittal has made veiled threats to shut “other ArcelorMittal activities in France” if he is interfered with in Lorraine.

But defenders of Mittal say he is going to do what Arcelor was going to do anyway. The Florange furnaces were due to close in 2009 because iron ore and coke have become scarce there. Mittal employs 20,000 workers in France.

Meanwhile anti-business French president François Hollande is presiding over a government whose share of GDP has risen to 56%, which is higher than Sweden and Denmark,  French industry has been losing 60,000 jobs a year for the past decade.