Opinion: Europe and an Airbus on rails | Opinion | DW | 27.09.2017
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Opinion: Europe and an Airbus on rails

French President Emmanuel Macron lays out his ambitious vision for Europe, and shortly afterwards industrial giants Siemens and Alstom announce their merger plan. It's no coincidence, says DW's Andreas Becker.

During his widely reported vision-setting speech on Europe yesterday, French President Emmanuel Macron made the case for strong European unity in an increasingly uncertain world. The timing of the speech was well-calculated - taking place shortly after the recent parliamentary elections in Germany, but before the start of coalition talks to form the next German government.

It was Macron's attempt to keep the European theme on the agenda, even in light of the gains German nationalists scored at the polls.

Numerous times during his speech, the French leader directly appealed to the Germans to consider closer integration of their two countries. "Why should we not set ourselves the goal of fully integrating our two markets by the year 2024 and applying the same rules for our companies - from corporate law to insolvency law?"

Becker Andreas Kommentarbild App

DW's Andreas Becker

"We can give a decisive and concrete Franco-German impulse," said Macron.

Green light from Paris and Berlin

How decisive and concrete this impulse could be became clear shortly after Macron's speech, when industrial giants from the two countries - Germany's Siemens and France's Alstom - announced their intention to merge their train divisions to create a European railway champion that can hope to face up to the competition from China.

It is unlikely that the merger plan came about without any coordination with the political actors in both nations. French media have reported that Paris recently sent a representative to Berlin to discuss the plan.

Economically, the merger makes sense. Any firm that wishes to succeed in the globalized business of railways, including sales of metros, regional trains and high-speed trains, needs to acquire the necessary size and financial strength. The Chinese state-backed rail behemoth CRRC, set up after the 2015 merger of the country's two railway firms, is the world's leading player in the sector with an annual revenue of around €30 billion ($35.2 billion).

Read more: 'Made in China' high-speed trains going global

The combined revenue of Siemens and Alstom would only be about a half of this figure, but it would be at least much higher than that of Canadian competitor Bombardier.

Joining hands against Chinese competition

The flagship trains of the French and German firms - Alstom's TGV and Siemens' ICE - have had to get accustomed to the fact that they are not as exceptional as they used to be. Many other countries now possess high-speed trains. But none is pouring more money into expanding its high-speed train network and related infrastructure than China.

Chinese Fuxing trains are racing at a speed of 350 kilometers per hour on routes between Beijing and Shanghai, much faster than the European trains. And it is probably only a matter of time before Chinese trains make do without European technology and make a sales push in Europe.

The worldwide market for trains will develop in the same way as the one for airplanes: few large manufacturers will dominate the business. Thanks to the European manufacturer Airbus, essentially a German-French project, competition prevails in the sector. The combined Siemens-Alstom entity could do the same when it comes to trains.

A Frenchman is expected to lead Siemens-Alstom, while the German side is tipped to hold the majority of the shares. This can be seen as a concession to Macron. Just a few years ago, French industrial policy would have deemed it more important to protect their "national champions."

The announced merger between Siemens and Alstom therefore reveals two things: Firstly, Emmanuel Macron is serious about his call for more European integration. Secondly, and this is no less important, Europeans will only have a chance to face up to global competition if they join hands and act together. 

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