France signs foreign investment veto order
The legislation signed by the prime minister Wednesday follows a long tradition of French state interference in corporate life
PARIS—The French government is broadening its authority to intervene when foreign companies want to buy firms the state considers vital, including in the sectors of transport, health and communications.
The order released Thursday goes into effect immediately, potentially giving the Socialist government more leverage amid General Electric’s $17 billion for the energy division of the French conglomerate Alstom, which makes power plant turbines and pioneered high-speed TGV trains. Alstom got a government bailout in 2005 and has struggled in recent years.
The government last year blocked the sale of the video-sharing website Daily Motion to Yahoo and is pressuring GE for a better offer.
“It’s the end of laisser-faire,” Economy Minister Arnaud Montebourg told the daily Le Monde.
Previously, the government was limited to intervention only in sectors directly related to defence and security.
In a statement Thursday, Montebourg said the government’s ability to veto foreign investment would be “applied in a selective and proportional manner, taking each situation into consideration.”
The order, signed Wednesday by the prime minister, follows a long tradition of French state interference in corporate life that claims to protect national security and to keep jobs and companies in the country. But the government has repeatedly said it welcomes foreign investment, among other measures it is hoping will kickstart an economy that on Thursday reported zero growth since January.