Siemens clears the air for Sarkozy's nuclear fusion

By Paul Betts
Published: January 27 2009 02:00

From the beginning, two of President Nicolas Sarkozy's pet industrial projects have involved bolstering the French defence sector and the country's leadership in nuclear energy. Unlike his predecessors, who championed forging closer industrial links with Germany, Mr Sarkozy seems to have long concluded the best way forward was for France to go it alone - especially in defence and nuclear energy.
The Franco-German EADS aerospace and defence group was supposed to create a European champion to compete against Boeing. But if EADS has shown one thing, it is the difficulty for Paris and Berlin to cooperate in what both consider strategic industries. When EADS tried to acquire the French defence electronics group Thales, the Germans blocked the deal fearing it would shift the group's centre of gravity too much in France's favour. Subsequent infighting and scandal in the French EADS camp enabled the Germans to gain an upper hand in Airbus, the EADS civil aircraft subsidiary.
Germany's increasing influence at Airbus seems to have persuaded Mr Sarkozy that France needed to consolidate its own defence sector rather than pursue the unworkable dream of German cooperation. With the beleaguered Alcatel-Lucent telecoms equipment group finally deciding to shed its core stake in Thales, Mr Sarkozy jumped on the opportunity to orchestrate a little French defence Meccano. Dassault, the maker of France's Rafale military jets, is buying the Alcatel-Lucent stake to become along with the government the core shareholder of Thales, thus creating a new French defence champion.
Now it is the turn of Siemens to pull out of two decades of strenuous but ultimately unsatisfactory efforts to cooperate with the French nuclear industry. The German group has decided to sell its 34 per cent stake in the joint engineering venture it had established with Areva, the French state-owned nuclear group. In so doing, it has cleared the way for Mr Sarkozy's longcherished plan to bring closer together Areva and Alstom, the French heavy engineering conglomerate he helped rescue a few years ago, to create a dominant nuclear energy group.
Siemens' move reflects in part problems of its own at home. With Berlin committed to a policy of winding down the country's nuclear programme, it was always going to be difficult for Siemens to compete in the world nuclear market without a strong domestic base.
Siemens had also tried and failed to take over Alstom when the French group was on the brink of collapse. Mr Sarkozy, then the French economy minister, fought furiously to block such a deal.
Areva's chief executive Anne Lauvergeon has since been fiercely resisting both Alstom's and Mr Sarkozy's designs on her group. She is lobbying the French oil group Total to step in and rescue her from the clutches of Alstom chief executive Patrick Kron. Total has said it wants to expand in the nuclear sector, but so far has shown a preference for dealing with GDF-Suez. Since Alstom's core industrial shareholder is none other than Bouygues, whose chairman is a close chum of President Sarkozy, the writing seems to be on the wall - however feisty Ms Lauvergeon may be.
No laughing matter
With the world in turmoil it is good to see that there is still one European leader who has not lost sight of his priorities.
Fresh from putting the boot into Sky Italia's 4.7m subscribers by doubling the VAT they pay on their television packages, the Italian prime minister last week weighed in to try to "encourage" one of Italy's leading comedians, Rosario Fiorello, not to switch his allegiances from the state-controlled broadcaster RAI to the Murdoch-owned competition.
Silvio Berlusconi summoned Mr Fiorello to lunch at his private residence, along with Gianni Letta, his persuasive chief of staff, and the justice minister. He cut to the chase, telling his guest he hoped he was not thinking of moving "to the enemy". Mr Fiorello, not wanting to offend, apparently changed subject, saying that if the PM wanted, he was available to replace Kaka, the AC Milan (also owned by Mr Berlusconi) striker then being pursued by Manchester City.
On leaving the lunch, the comic was besieged by waiting reporters keen to know the outcome of the comedy summit. Having relayed the PM's concerns, Mr Fiorello was kind enough to oblige with the scoop that he would indeed be moving to Sky Italia in April, while also making clear his decision was nothing personal against the PM or anything to do with the cooking.
Mr Berlusconi, who has been encouraging his own Mediaset network and the state-controlled RAI channels to lighten up their output, which he views as unhelpfully gloomy, presumably failed to see the funny side of Mr Fiorello's decision.
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Copyright The Financial Times Limited 2009