x Abu Dhabi, UAETuesday 25 July 2017

Hollande's dispute with Mittal reflects economic culture clash

France is also competing with other European nations, all struggling to overcome a grave financial crisis and cut unemployment, to attract investment from the emerging economies of India, China, Russia and South America.

LONDON // France's socialist president, Francois Hollande, has threatened to nationalise the billionaire Indian industrialist Lakshmi Mittal's French steelmaking operation in a furious row over job losses.

The prospect of taking the business into state ownership was raised by the president before the tycoon arrived at the Elysee palace for talks.

Their meeting was already destined to be tense after an incautious outburst from a senior minister that Mr Mittal's company, ArcelorMittal, the world's largest steel producer, was "not wanted in France".

This led to an unexpected twist in the controversy when London's flamboyant mayor, Boris Johnson, on a visit to India, seized on the remark to urge Indian entrepreneurs to flee French socialism and invest in Britain.

Mr Mittal, who has been listed as the wealthiest individual in the United Kingdon and 21st richest in the world, with a fortune estimated by Forbes at US$16 billion (Dh58.8 bn), wants to close two blast furnaces at Florange, in north-east France.

This would mean a loss of 625 jobs, although he wishes to maintain activities at the site - which employs 2,500 - that he regards as profitable.

The dispute, and the way it has developed, reflects a clash of culture and philosophy as Mr Hollande's attempts to engineer a socialist transformation of the French economy.

But France is also competing with other European nations, all struggling to overcome a grave financial crisis and cut unemployment, to attract investment from the emerging economies of India, China, Russia and South America.

ArcelorMittal's plans have caused widespread anger in France, not least because of subsidies the company has received. But few were counting on the added ingredient of the mayor of London's mockery.

Speaking in New Delhi, Mr Johnson promised a warm welcome in Britain for wealth creators from India.

Referring to the ragged-trousered partisans of the 18th-century French revolution, Mr Johnson told the Federation of Indian Chambers of Commerce and Industry: "The sans-culottes appear to have captured the government in Paris and a French minister has been so eccentric as to call for a massive Indian investor to depart from France. I have no hesitation or embarrassment in saying to everyone here 'venez a Londres, mes amis'.

"Come to London, come to the business capital of the world, the place where 73 Indian firms are listed on the London Stock Exchange, where Indian companies already raise 53 per cent of their international equity."

The mayor, whose outspoken manner has become a trademark, was commenting on comments by Arnaud Montebourg, France's industrial recovery minister, to the French business newspaper, Les Echos, who said: "We do not want ArcelorMittal in France any longer because they do not respect France."

The harsh words are reported to have shocked Mr Mittal's family.

Citing the 20,000 jobs provided at 150 French sites by the tycoon's business empire, the left-of-centre newspaper Le Monde said Mr Hollande should not only distance himself from his minister's rhetoric but also put an end to "role play that undermines political words and deeds".

But mindful of the need to be seen defending French jobs, at least one senior conservative opponent offered some support to Mr Montebourg. "He is wrong to resort to polemic but, in substance, he is right," said Henri Guaino, who was an adviser to the former centre-right president, Nicolas Sarkozy. "The state cannot remain indifferent to the fate of steel."

Far from publicly rebuking his minister, Mr Hollande said before meeting Mr Mittal that nationalisation was on the agenda.

A group of 40 socialist members of parliament had earlier called for a temporary state takeover of the ArcelorMittal plant. One opinion poll indicates 59 per cent public support of that plan.

After the Hollande-Mittal meeting, which lasted an hour, the tycoon left as discreetly as he had arrived. A presidential statement, echoed by the company, said Mr Hollande had asked that discussions between the state and the company should continue until today's deadline to find a new investor for the Florange site.

The row has left two of its main protagonists unrepentant. Mr Montebourg said that when he said "we do not want Mittal in France", he was referring to "Mittal methods in France, which are methods of non-compliance, blackmail and threats" and not to the tycoon's wider interests.

As for the straight-speaking mayor of London, it is unlikely that his intrusion into French politics will harm him domestically.

After centuries of bickering and at times worse between France and Britain - a former president, Jacques Chirac, likened Anglo-French relations to a stormy love affair - the barbs flow in both directions.

The British prime minister, David Cameron, had already irritated Mr Hollande's government by saying red-carpet treatment awaited any French investors wishing to escape socialist taxation policy. Reaction in France included a reminder that while many French people crossed the English Channel to work, they tended to go home for health and education because, in the words of one parliamentarian, public services "no longer exist" in Britain.

foreign.desk@thenational.ae