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France disappointed with Brussels’ decision

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The European Commission this week told France the state could not help Alstom out of its current difficulties. This means Paris will have to decide whether to let the engineering firm go bust or allow it to make partnerships with foreign firms.

The EU executive said it would only allow the French state to help Alstom financially if the firm agreed to secure one or more partners for a central part of the business within a fixed length of time.

Alstom could choose whichever partner or partners it desires, provided they are not state-owned. Sources have, however, speculated that the Commission’s restrictions were designed to encourage a deal between Alstom and Siemens.

Where Alstom produces the TGV high-speed train, Siemens makes the German equivalent, the ICE. Sources close to Siemens have, however, said the German firm is not interested in making a bid for Alstom’s transport division, with a joining of the ICE and TGV proving difficult for competition reasons. Siemens has, instead, previously expressed interest in Alstom’s turbine business.

The Commission also said Alstom must simplify its business structure to save money – a common obligation for state-aid cases. The firm has, nevertheless, already sold parts of its business to boost necessary revenue.

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