Inside Business: Dirigisme dies hard in France

By Hugh Carnegy in Paris

Industries regarded as having national importance are being brought under the government’s wing

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Arnaud Montebourg could hardly have chosen a more fitting day to launch his latest public assault on one of the world’s biggest companies. The voluble French industry minister’s boast that he had blocked Yahoo from “devouring” Dailymotion, a French video website that the US group wanted to acquire, came as trade unionists were gathering at La Bastille for their annual May Day parade.

By preserving Dailymotion for the nation, the socialist minister may be attempting to save some face with French workers after his failure to stop the closure of an ArcelorMittal steel furnace at Florange in the north of the country. But the startling implication is that France has added dotcom companies to the list of those to be shielded from foreign takeover. This raises the question of exactly what President François Hollande’s policy is on state ownership and control of companies.

Mr Montebourg, whose spat with Yahoo followed very public clashes with Maurice Taylor, head of US tyremaker Titan International, and the owners of carmaker PSA Peugeot Citroën, irks French business leaders as much as foreign counterparts.

The man in charge of the “Say Oui to France” inward investment campaign is clearly doing little for France’s image with investors. His move against Yahoo followed a week in which Mr Hollande had made overtures to Chinese investors and entrepreneurs at home to show that the country was open for business.

While that message has now been made much less audible, the government has adopted a more pragmatic approach than Mr Montebourg’s megaphone suggests.

Last week, the Florange blast furnaces finally went cold despite the industry minister’s threats of nationalisation and a stream of insults hurled at owner Lakshmi Mittal. The cash-strapped government accepted that a promise by ArcelorMittal to avoid compulsory redundancies and reinvest in the rest of the site was the best that could be achieved. PSA’s big plant closure and redundancy plan now has government backing.

Since the Florange affair, the word nationalisation has scarcely issued from ministers’ lips. In fact, in the past month, the government has raised more than