Chirac does it again

On my website, I have two articles. One by Chirac and one by Wolfowitz. Chirac states that he believed Europe should unite to take on globalization. He highlighted how his government (along with Germany) spent money on the "most promising sectors." He also reinforced the idea that if he helps to reform CAP, then other nations must "give and take" (reinforcing the mistaken view that trade liberalization is a zero sum game). On the other hand, Paul Wolfowitz's article points to trade liberalization as the best remedy for enriching the wealth all nations around the world.

And now in yesterday's Financial Times, President Chirac does it again. He continues his misguided fight to "protect" European wealth. This time he is opposed to foreign interests (in this case - America) taking over Euronext (a European conglomerate of exchanges). This is the third fight against foreign takeovers of French companies by Chirac in a couple months. First, it was his block of Enel's (Italy) potential takeover of Gaz de France (France) with a government-backed merger of Gaz de France with Suez (France). Then it was Chirac's opposition to the potential hostile takeover by Mittal Steel's Lakshimi Mittal of France's Arcelor (the world's second largest steelmaker). Now it is the potential NYSE/Euronext merger.

The problem is that mergers should be purely based on economics and shareholder interests. If politics were to get involved, efficiency would be its victim. Chirac might favor a "Franco-German" solution. However, if a politically forced merger were to take the place of the current one, the company might be set up for failure. This fact is best summed up by the difference in opinions between Chirac and his German counterpart, Merkel:

Mr Chirac said: "I will not hide the fact that I favour the Franco-German
solution for reasons of principle, and I would regret it if this solution is not
adopted in the end."Angela Merkel, Germany's chancellor, was more reserved,
saying: "We have always thought that in Europe it is good to build strong
economic units." But she added that any merger would be "a purely economic
decision" and said "these are events over which we can exert no influence".

The one of the largest shareholders of Euronext said it best with the following quote:

Yes, a merger makes sense with one or the other. But to decide which partner is
best, we must put them in competition until the very last moment.That is the
role of management, not to block one and to throw yourself into the arms of the
other.