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Last Updated: Saturday, 16 April, 2005, 21:39 GMT 22:39 UK
Rover highlights Anglo-French divide
By Paul Reynolds
World Affairs correspondent, BBC News website

The issue that dares not speak its name in the UK general election is on everyone's lips in France. It is of course the European constitution, on which the French vote in a referendum on 29 May and which the major British parties have largely avoided talking about.

Worker at the Rover plant, Birmingham
France would have taken a very different approach to the Rover crisis
Their approaches to the issue say a lot about the differing viewpoints of the two countries towards their supposedly joint endeavour to build an "ever closer union", as the current Treaty of Rome puts it.

The collapse of the Rover car group illustrates the arguments.

For the UK it is a matter of regret that the last major British manufacturer has gone, but it is not a matter that will change government policy. The market has spoken and the market must decide.

For the French it is a warning.

In Britain, there is no question these days of taking such failing companies into public ownership. The prevailing philosophy is that government should not run industry.

In Paris, on the other hand, it is stated policy that France "should be present", as the elegant phrase has it, in all the major industrial enterprises.

This does not mean crude nationalisation of the old type. Instead, the French have evolved a system of maintaining a major government shareholding in key companies so that they can always pump in more cash under the guise of shareholder "investment" if a company begins to fail.

Some of this comes close to subsidy and the European Commission is constantly challenging the French moves, but over the years France has been very successful at defending its policy.

Thus, the French have ensured that they have their own car companies. It is inconceivable that they would allow what has happened in Britain - where foreign, including French, manufacturers dominate and the government even goes across the world to China to seek a saviour.

Government grip

The French attitude was summed up some years ago when they forced Japanese importers of videos to send them for customs formalities to the inland town of Poitiers - which just happened to be where the Franks defeated an invading Arab army in 732.

Recently, French government ministers intervened in the pharmaceutical industry to ensure that there was a major French player in it.

Cars on the scrap heap, with a Rover car shown in forefront
The UK government has put Rover's collapse down to market forces
France has also maintained control of its energy supply industry. It is so structured that the state keeps major interest in the companies.

The companies are still technically private but their future cannot be decided without government say-so. The result is that they can take over others but will never be taken over themselves.

Few people in London know that their supplier, EDF, is actually Electricite de France. EDF has happily acquired foreign enterprises but no French government would let it fall into foreign hands. The French are moving only slowly, and only under pressure from the EU, towards liberalising their energy market.

This is the background to the hostility shown by many in France, especially on the left, to the EU constitutional treaty.

In particular the French sceptics argue that free market doctrines are embedded in the new treaty in a way that makes the kind of social and industrial policy that is such a feature of French life much more difficult to pursue.

They see the constitution as a victory for the so-called "Anglo-Saxons," a code phrase for US President George W Bush and Mr Blair, whom they accuse of being a faithful follower of former UK Prime Minister Margaret Thatcher. For them the constitution is existential.

For the British, on the other hand, the EU is still something to be endured. And, as far as the two main parties are concerned, it is something to be ignored. Their policies towards the constitution are buried deep in their manifestos.

The issue has not had an impact in this election.

If the French vote No in their referendum, then the next British government will be spared the problem of holding one here.

But if the French vote Yes, then this is an issue that will have to speak out.


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