Siemens-Alstom merger: Will the EC succumb to Franco-German pressures for the sake of May’s EU Elections?

A TGV train in France (Pixabay, 2019)

It was yesterday when executives of Siemens and Alstom met with EU Commissioner Margrethe Vestager in one of their last attempts to convince her to give the green light for their merge. The European Commission (EC) is now left to decide till February 18 whether or not to approve the merger of the rail operations of Siemens and Alstom. In the meantime, both companies agreed to sell a set of assets in an attempt to promote as much as possible the promising acquisition.

However, the EC is profoundly investigating the case and is having numerous concerns as it is believed that this merger will reduce the competition in the supply of several types of trains and signalling systems creating a Franco-German rail monopolistic champion in the EU arena.

Background

The EC was only notified about the decision of Siemens AG to acquire Alstom SA on the 8th of June 2018 despite the two companies had demonstrated their will back in September 2017. Since then, the EU’s executive body has opened an in-depth investigation to assess this merger under the EU Merger Regulation. The EC has until February 18 to inform both companies about its decision.

Both firms have a wide portfolio of high speed trains and safety control systems on mainline and urban rail networks. Together these companies will create a giant EU rail operator which can bring tremendous changes to the market and a monopolistic environment that favours them only and not the European consumers.

EC stance

The EC and especially the Competition chief Margrethe Vestager has logical doubts regarding this acquisition as there is chance that it will lower competition and increase prices. More specifically, Commissioner Margrethe Vestager has mentioned on the case:

“Trains and the signalling equipment that guide them are essential for transport in Europe. The Commission will investigate whether the proposed acquisition of Alstom by Siemens would deprive European rail operators of a choice of suppliers and innovative products, and lead to higher prices, which could ultimately harm the millions of Europeans who use rail transportation every day for work or leisure.”

Siemens-Alstom last merger’s attempts

Last month, competition officials from the UK, Holland, Spain and Belgium sent a letter to Commissioner Vestager where they said that Siemens and Alstom have not made enough compromises as they are required to and by extension this merger should not proceed.

However, both companies are pushing forward the sale of train equipment assets as a last resort to persuade the EC that this acquisition must be materialized. According to Bloomberg though, Alstom supports that no more assets will be sold in order to assure the approval of the EC on the issue.

Franco-German alliance

Both France and Germany support the acquisition of Alstom by Siemens. The will of the two governments to consolidate their power in Europe and their economies ahead of the upcoming EU elections next May is more than apparent. The two companies are merging in order to be able to create an huge EU train maker conglomerate that will be able to compete with the Chinese rival CRRC (China Railway Rolling Stock Corporation) and Canada’s Bombardier Transportation.

French Economy Minister Bruno Le Maire mentioned last Sunday that a decision against this acquisition would affect the European bloc’s industry. In detail, Mr. Le Maire said in a Europe 1 radio interview:

“If the European Commission was to make an unfavorable decision regarding this merger, it would be for the wrong reasons. It would not only be an economic error but also a political mistake because it would weaken the whole European industry faced with China”.

Will the EC succumb to the political pressures or remain unaffected and refuse to the creation of a giant train maker which could change the current status quo? So far, Margrethe Vestager has shown her credibility by enforcing the EU laws strictly even, against US tech giant companies and despite EU’s long love, fear and admiration for the US. Nevertheless, an action such as the one to sell train assets has been welcomed by the EU officials.

Will the train run over the EU consumers?

All in all, it is quite certain that it would be a tough competition decision for the European Commission which has only about a month to consider all aspects and conditions ahead of the imminent European elections. Will the EC decide as a political stakeholder or regulator?

What matters the most at the end of the day is not to please the shareholders of two of the biggest companies in Europe so that politicians can clap their hands at the EU elections night, but above anything else to protect the rights of the EU consumers who would be always left to be a helpless pray to any giant monopoly in the Old Continent.

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

Stopping antimicrobial resistance would cost just USD 2 per person a year

The Banking Union may lead to a Germanic Europe

Youth policy in Europe not delivering for young people

IMF: Sorry Greece it was a mistake of 11% of your GDP

Why lay people don’t expect anything good from G20

Pesticides: MEPs propose blueprint to improve EU approval procedure

The Commission neglects the services sector and favours industry

South Asia can become an innovation hub. Here’s how

These 4 Nordic countries hold the secret to gender equality

China in My Suburbs

Earthquake: Monte Dei Paschi Di Siena

UK must make clear what it wants, MEPs say in Brexit debate

G7 summit: Trump Vs. G6 leaders on trade and climate change

Why a healthy planet and a healthy economy go hand-in-hand

Snowden is the “EU nomination” for this year’s Oscars

The challenge of maintaining interest in Primary Health Care in medical students

Cocaine and opium production worldwide hit ‘absolute record highs’ – major threat to public health says UN study

ECB readies itself for extraordinary monetary measures defying Germany

UK Labour Party leader Corbyn readies to change Brexit political backdrop

2019 EU Budget: Commission proposes a budget focused on continuity and delivery – for growth, solidarity, security

Online government services could change your life. But only if you have access to the internet

UN forum to bring ‘big space data’ benefits to disaster response in Africa

Use “blockchain” model to cut small firms’ costs and empower citizens, urge MEPs

Close to final agreement on the EU Banking Union

UN chief welcomes event reuniting families on the Korean Peninsula

EU-U.S. Trade Talks: European Commission presents draft negotiating mandates

Financial Transaction Tax: More money for future bank bailouts?

China, forever new adventures

MEPs agree on new rules to tax digital companies’ revenues

Ship Recycling is the Commission’s Titanic

Dreaming of China

Drought in Europe: Commission presents additional measures to support farmers

Young? You should work out the entrepreneurial heart before the mind

Quicker freezing and confiscation of criminal assets in the EU

Third Facebook-Cambridge Analytica hearing: data breach prevention and cures

Draghi’s 2018 compromise: enough money printing to revive inflation and check euro ascent

Why do medical students have to emigrate to become doctors in 2017?

Poverty data never tells the whole story

Spotlight Initiative – EU and UN fight against domestic violence in the Pacific region

Top UN political official updates Security Council on Iran nuclear deal

Stigmatized, shunned and shamed, International Widows’ Day draws attention to their unique needs

Our present and future tax payments usurped by banks

Commission caps charges on card and Internet payments and enforces competition

Greater support needed for refugees and migrants from Venezuela – UN

China’s cities are rapidly becoming more competitive. Here’s why

Fresh airstrikes kill dozens in conflict-ravaged Syria

EU Commission: The banks are not obliged to finance the real economy

Climate change is speeding up. Our response needs to be even faster

The West – the EU and the US – is writing off Turkey’s Erdogan

The New Year 2016 will not be benevolent to Europe

Everybody against Japan over yen’s devaluation

Syria: UN-backed watchdog says chemical weapon ‘likely used’ in February attack

Presentation of Juncker’s Investment Plan: Can 315 billion euros save the EU?

Brexit: the time has come for the UK to clarify its position

Here are 4 tips for governing by design in the Fourth Industrial Revolution

The Parliament paves the way for the creation of the European Banking Union

Top envoy to Yemen praises ‘flexibility’ of chief negotiators as new UN mission chief is named

Rising landmine blast toll in Afghanistan highlights long-term care needs of survivors

EU budget: Commission proposes most ambitious Research and Innovation programme yet

Capital Markets Union: Making it easier for insurers to invest in the real economy

Moves to create a Kosovo army have ‘deteriorated relations’ with Serbia: UN peacekeeping chief

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s