Vestager defends EU merger rules, says competition creates strong cos

EU antitrust chief Margrethe Vestager on Thursday rejected calls for a shake up of European merger rules, saying the best way to create companies strong enough to compete with U.S. and Chinese rivals is to foster competition.
 

Vestager's comments came a day after former Italian Prime Minister Enrico Letta in a 147-page report urged a reboot of the EU single market to catch up with the United States, China and other rivals in a global race in new green and digital technologies.
 

Former ECB president Mario Draghi, mandated by European Commission President Ursula von der Leyen to come up with proposals to revitalise the EU's economy, is expected to echo the same sentiments in a report due in June.
 

"If you ask me, when you have a beautiful tree, admire it, cherish it, hug it once in a while and you will see that it will keep growing," she told a conference to mark the 20th anniversary of rules last updated in 2004.
 

"The merger regulation serves businesses and consumers and the European economy as a whole very well. It has protected competition in the single market and by doing so, keeping the markets fair and contestable."
 

"Our merger enforcement sets the stage for European companies to rise up and to become champions in their fields. So effective merger control is crucial to European businesses," Vestager said.
 

Telecoms companies have been the biggest proponents of looser merger rules as they look to consolidate to boost revenues and market power amid costly investments to roll out 5G and broadband. However, regulators are wary of deals that reduce the number of players from four to three, on concern this would push up prices.
 

"Merger control does not stand in the way of pro-competitive consolidation. In fact, we have given the green light to many mergers that directly produced truly global champions based in Europe," Vestager said.
 

She cited the examples of the combination of automakers to create Stellantis and the tie up between French waste and water management companies Veolia and Suez to create a global group. She also pointed to the deal by Siemens and Gamesa to create the world's biggest maker of wind turbines, which she approved.
 

"One does not foster competitiveness by abandoning it within the European Union in the hope that European monopolies will better compete with rivals outside the European Union," Vestager said.
 

"Local champions, they are competitive abroad when they are pushed to be efficient, lean, innovative because they are faced with competition at home. Competitiveness within the single market translates into external competitiveness."