Kamal Nath''s intervention nudges EU on Mittal
16 February 2006Commerce minister Kamal Nath's interventionist diplomacy with EU trade commission on the hostile reaction of European governments to L N Mittal's bid for Arcelor has led to trade commissioner Peter Mandelson stating that he would take up the issue with the European Commission.
India had pressurised the European Union to take up the issue of Mittal's take-over bid as it was an attempt to thwart WTO rules on the grounds that it was a question of providing cross border investment a national treatment, a commitment made by EU during the WTO negotiations.
Meanwhile, Luxembourg has appointed merchant banker Morgan Stanley to analyse the $22.3 billion offer made by Mittal Steel to buy its European rival Arcelor SA, based out of Luxembourg.
Nath had been particularly irked at the display of open hostility by the French government's attitude and attempts to give a nationalist hue to the issue. French foreign minister Thierry Breton, had reacted to the news of Mittal's bid to take-over Arcelor by embarking on a whistle-stop tour of European capitals to drum up pan-European support against Mittal. (See: EU Competition Commissioner attempts to calm hostility to L N Mittal's Arcelor bid)
Nath felt that rather than intervene in the matter, the French government should have left it to the shareholders of the company to decide whether to reject or accept Mittal's offer..
The bid had sparked hostile objections from the governments of France, Luxembourg and Spain, EU parliamentarians and from labour unions on grounds of job losses despite Mittal's assurance to protect jobs. He even cited the example of his other operations in various countries not having resulted in retrenchment.
The issue is also likely to figure when the prime minister Manmohan Singh meets French president, Jacques Chirac during his coming visit.