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French government getting more protective of nation's companies

Less than two weeks after he intervened to prevent drug maker Aventis SA falling into Swiss hands, France's finance minister is rolling up his sleeves to mold the destiny of another listed company, troubled engineering giant Alstom.

Nicolas Sarkozy's actions are worrying liberal economists and investors in France, who fear a trend toward state meddling in the decisions of publicly quoted companies and their shareholders.

"The government appears to have taken a wrong turn," said Marc Touati, chief economist at French bank Natexis Banques Populaires.

Near-bankrupt Alstom was always bound to be a special case, since the state is the biggest buyer of its power plants, ships and high-speed TGV trains.

Unlike Aventis shareholders, Alstom's weary investors and creditor banks are unlikely to object to the involvement of Sarkozy, who discussed rescue plans with EU antitrust chief Mario Monti on Monday.

But Germany's Siemens AG, Alstom's main rival, is keeping close watch to ensure the French company does not benefit from any more state aid.

The conservative government of French Prime Minister Jean-Pierre Raffarin is proving to be anything but laissez-faire, say observers, who were struck by its involvement in the takeover battle for Franco-German Aventis.
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