ABSTRACT
Trade liberalization has dramatically increased the exposure of the European economy to the winds of international competition. While this opens up markets for European Union (EU) firms it also increases competitive pressures at home. The early part of the new millennium witnessed indications that some members of Europe's policy-making elite were attracted to national champion strategies as a means of reversing the EU's perceived decline in competitiveness. France has been the most active exponent of this policy, and the government intervened in mergers in sectors such as pharmaceuticals, defence, engineering and utilities. The French government was not, however, the only actor to speak warmly of large, national (or bi-national) champions. Some even think that EU Commissioner for Enterprise and Industry Gunter Verheugen is supportive of this policy, as he mooted the creation of more pan-European firms via a more relaxed competition policy (Buck 2005). What distinguishes the current interest in strategic sectors from the national champions of old is its defensive nature. The aim of brokering mergers in the French utility sector — or denying American efforts to buy a consumer foods group — is not to create a national champion capable of taking world market share; it is simply to protect the domestic market.
