Germany\, France take aim at EU anti-trust rules in new industrial strategy

Smarting from the EU's veto of an Alstom-Siemens rail merger, the two European powerhouses proposed in a new strategy to build European industrial "champions" that national authorities should in some cases be able to override decisions made by Brussels.

Critics of the EU's decision had argued that it was based on competition regulations that they said were obsolete in the face of growing rivalry from Chinese giants.

"The choice is simple when it comes to industrial policy: unite our forces or allow our industrial base and capacity to gradually disappear," the two economy ministers, France's Bruno Le Maire and Germany's Peter Altmaier, said in a joint statement.

"Competition rules are essential but existing rules need to be revised to be able to adequately take into account industrial policy considerations" that can help European companies compete on the world stage, they said.

Only five European firms count among the world's 40 biggest companies, they said, adding that currently, "there is no regulatory global level playing field.

And there won't be one any time soon." Some countries like China subsidise their companies heavily, or place restrictions on foreign investments in their industrial champions.

EU competition rules should therefore be reformed to take the tough global landscape into consideration, argued Berlin and Paris.

Existing rules needed to be revised to take the longer view, and in "well-defined cases" it should be considered whether EU decisions could be overridden, they said.

"We will dig deep into this proposal," said Le Maire at a press conference with Altmaier.

"In cases where we believe a merger is particularly appropriate but which is opposed by the European Commission, we will say the countries believe that the merger should go ahead." In a separate forum later Tuesday, Le Maire lashed out at Brussels for blocking the Alstom-Siemens merger.

"There is sometimes nothing more stupid than European rules," he said, noting that "these rules were invented in the 20th century, and they are leading to economic and political mistakes." Citing China's state-own rail giant CRRC as an example, the French minister said the Asian behemoth is currently four times bigger than Alstom and Siemens combined and won a tender in the United States.

"Despite that, we're rejecting the merger" of the European groups, he said.

"We will not succeed without a European champion that's capable of investing, innovating and keeping value-add at home. We should change European competition rules to defend our interests."

In the same vein, the ministers also argued that European companies must be given access to public tenders in non-EU countries that want to participate in projects in Europe.

"Reciprocity is perhaps one of the most effective ways to make progress towards a global level playing field," they argued.

Both sides however took pains to stress that their strategy is open to other EU members that want to sign up.

"It is clear that Germany and France should not decide alone when and how these rules should be changed," said Altmaier.

"We will take the initiative, we will talk with our partners in the EU, with the European Parliament and with the Commission.

"We will see for which ideas there is support and we will try to reach a good conclusion." Beyond the proposed reforms of competition rules, the overall industrial strategy to build European champions includes a push for greater investments in innovations and calls for new mechanisms to better protect homegrown technology.

As a first concrete project, both sides will cooperate in the production of electric batteries -- an essential component in the race to electrify automobiles.

The ministers named an initial price tag of 1.7 billion euros (USD 1.9 billion) but gave no further details including the possible location.