French 'Covert Aid' to High-Speed Train Manufacturer Politically Motivated

The French government's plan to save the historic Alstom train plant through a state order immediately grabbed local headlines, with many doubting that the measure will work.

The French press harshly criticized the government's rescue plan related to the Belfort-based Alstom factory, known for producing France's first steam train in the 19th century and later pioneering the construction of high-speed TGV trains.

Earlier this week, the government announced orders for at least 15 high-speed trains, "mostly for tracks on which they cannot run at their maximum speed, in a pre-election bid to preserve jobs at the Alstom plant, according to the news network France 24.

The decision came after Alstom promised to transfer 400 of the plant's 480 jobs elsewhere, in a move that is expected to reduce the factory to a maintenance depot.

Alstom employees take part in a nationwide protest day against the new French labour law next to the main plant of the French engineering giant Alstom in Belfort, France, September 15, 2016

© REUTERS / Jacky Naegelen

In an interview with Sputnik, economics expert and blogger Charles Sannat questioned the government's salvation plan regarding Alstom, saying that a year after the presidential elections in France the problem will again come to the fore.

"The plan may cause problems pertaining to European competition law, and it is unclear whether this plan will be implemented. The French government's unilateral order via Alstom is an illegal move and it is really hidden aid [to French industry]," Sannat said.

This view is echoed by Yves Pozzo di Borgo from the center-right UDI party, who is also deputy chairman of the Senate's Foreign Affairs Commission.

French state ready to buy over-sized, overpriced trains just to save an #Alstom factory. Why? Elections in 6 months. https://t.co/bM0BSu4CkV

— Maxime Sbaihi (@MxSba) 4 октября 2016 г.

Speaking to Sputnik, he suggested that the European Commission for Competition is "very likely to the project," which he said can be described as "a pre-election move by President Hollande, who wants to delay the closure of the Alstom plant for the period that will follow the presidential elections [in France]."

"He knows full well that the decisions will not be taken immediately. He hypocritically declares that 'we will do it' although the European Commission for Competition may reject the project because it is not related to direct subsidies and is out of line with economic standards," he said.

When asked about whether the government's rescue plan for Alstom will ever be fulfilled, Charles Henri Gallois, spokesman for the opposition Union Populaire Republicaine party, told Sputnik that under European law, all government orders should be in sync with relevant procedures.

"For an order worth more than 418,000 euros, a competitive bid is required. You cannot just send the order and select a supplier beforehand. Instead, you are supposed to announce a bid and provide many criteria, and it will be won by those who offer the lowest price," he said.