Barriers to Cross-Border Mergers

Since the summer of 2005, a number of EU member states have erected barriers to prevent cross-border mergers and acquisitions that undermine the effort to deepen the single market. Some in the media and representatives of the European Commission in Brussels have claimed that these actions are evidence of resurgent economic nationalism in Europe. Unlike in the 1980s when the main opposition to the creation of a Single Market came from companies resistant to being exposed to more international competition, the main opposition today comes from national governments and politicians fearful of losing national prestige and jobs as a result of merger activity. Impact on U.S.
Several members of the European Union (EU) over the past two years have been erecting barriers to cross-border mergers and acquisitions, possibly in violation of their Single Market commitments. The main focus of these anti-competitive actions, often dubbed economic nationalism or economic patriotism by the press, is on corporate control, particularly in the banking, steel, and energy sectors. Unlike in the 1980s, when the main opposition to creation of the Single Market for goods, capital, labor, and services came from companies resistant to being exposed to more international competition, the main opposition to liberalization today comes from some member state governments (and or politicians) fearful of losing national prestige and jobs as a result of merger activity. This report examines the nature and significance of rising economic nationalism, as well as how U.S. interests may be affected. The report will be updated as events warrant.