Chirac's Trip to India May Be Overshadowed by Mittal Dispute

[shugah]

Feb. 16 (Bloomberg) -- French President Jacques Chirac, visiting New Delhi next week, may find his call for increased trade overshadowed by the uproar over Indian businessman Lakshmi Mittal's attempt to take over a European steel maker.

Chirac is seeking to sell more French goods to the world's second most populous nation while European governments try to repel the $23.7 billion hostile bid by Mittal Steel Co. for Luxembourg- based Arcelor SA.

``If the bid was to be vetoed politically, then the question would be: why should India buy things from France?'' said B.G. Verghese, an analyst at the Center for Policy Research in New Delhi in an interview Feb. 9.

India offers just what France needs: A fast-growing market hungry for airplanes, power plants, and highways. The French trade deficit ballooned to a record last year as demand slumped in Europe, destination for 65 percent of French overseas sales. India buys less than 0.5 percent of French exports.

``India is an enormous country with great growth potential: we have to go there,'' said Alexandre Bourgeois, an economist at Natexis Banques Populaires in Paris in an interview Feb. 9. ``Until now, India has been a rather weak trade partner for France, where exports are very focused on the euro zone and growth is much weaker. It makes sense to go for growth.''

http://www.bloomberg.com/apps/news?pid=10000087&sid=aZ_idNInphCc&refer=top_world_news

[tocqueville]

1. there is a little flaw in all this...

France has no power to "veto" anything. Arcelor is a Luxembourgian-French-Spanish private company. The only state that has (minority) shares in Arcelor is Luxembourg. The only thing France can do is to ensure that the hostile bid is down legally and not breaking any market rules. Then the shareholders decide...

Verghese doesn't know what he is talking about or has another agenda...

Besides the French deficit is not bigger than the German (or Italian). So that's not a special issue there either.

[fujiyama]

2. Also isn't Mittal Brritish now?

I'm not sure which nation he's a citizen of, but he bouughht a $128 million dollar home/palace in England. I'm guessing he's a British citizen at this point.

The guy may have been born and grown up in India, but he really isn't Indian any more. I don't know how one thing (the bid to take over thee steel company) has to do with increasinng trade with France.

[tocqueville]

3. the company is Dutch n/t