E.U. Competition Rules must be revamped before finalising Alstom-Siemens rail merger

The French Minister of Europe Affairs Nathalie Loiseau argued on Sunday that the European Union’s competition rules are not working to the benefit of consumers. According to the French Minister, European competition rules are outdated and require modernisation. This statement came within the context of the proposed mega-rail merger between the French rail transportations conglomerate Alstom and the German counterpart, Siemens Mobility.

The French Minister stressed the importance of the merger which would compete global adversaries. A successful Alstom-Siemens merger infers increased European competition against the state-owned Chinese CRRC and the Canadian conglomerate Bombadier Transportation. For her part, the E.U. Competition Commissioner Margaret Vestager plans to block the eventual merger, even with a veto vote if necessary. The European Commissioner claimed the merger’s new high-speed rail trains will exceed the European designated limit of 300 kilometres per hour. This speed violation in turn implies that the new rail does not conform to established European safety preconditions. Further, the Commissioner accused the deal of monopolistic intentions, given that both companies appear unwilling to share the patents of high-speed rail technologies to market contenders.

For the German media, the Alstom-Siemens merger represents a wedding of market elephants. The project aspires to create a workforce of 60.000 personnel and revenues exceeding €15 billion per annum. The project would also shelter three regional rail brands under a single roof. The contenders entail Italy’s Pendolino high-speed trains, Deutsche-Bahn’s Intercity Express (ICE) rail, and France’s TGV service.

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