If I were French and our rolling stock were competitive, I’d be upset if the government gave a leg up to the competition given the strong unions and jobs the TGV provides. It may save a buck or two but it also is a blow against local producers.
https://europa.eu/youreurope/business/selling-in-eu/public-c...
http://ec.europa.eu/competition/state_aid/overview/index_en....
Which is the key phrase. The EU is perfectly fine with protectionism so long as it is non-EU countries who are being excluded. For example, the cap of foreign ownership of EU airlines at 49% has no basis other than protecting local companies.
Not only they are bad for the economy, they're also mostly illegal in the EU.
> If I were French and our rolling stock were competitive
Well, it just wasn't as competitive as the German one.
It essentially accounts to government subsidies for a certain company.
And that's why it is illegal in the EU.
https://en.wikipedia.org/wiki/Import_substitution_industrial...
The EU is an arbitrary distinction.
Why stop at the EU?
If Tau Cetians can produce trains cheap we ought to buy trains from Tau Ceti.
Never mind that it puts the locals out of a job, diminishes local pride in locally manufactured goods, and what do the Tau Cetians care if the trains are unreliable and in comfortable.
Economics doesn’t occur in a vacuum, and it doesn’t matter if my opinion is economically factually incorrect: the National morale does matter.
But, if you hold competition above all else, then we have an ideological mismatch, and no amount of fact or opinion sharing is likely to help.
I don't even know how to reply to that. Not only you're completely wrong, but you're a nationalist who would sink your country for "national pride".
Kinda like North Korea.
Won't make it good, but you're still free to want.
Investing in local industry is perfectly wise. A country that has a skilled workforce, good infrastructure and efficient capital flows is likely to be highly competitive on an international level. Propping up industries just because it's politically easy is the first step down a very slippery slope.
Alstom is comfortably profitable and doesn't need propping up. What's more, it is substantially reliant on export contracts that could be severely jeopardised in a culture of protectionism. The multi-billion dollar contracts it has to provide trains to India, South Africa and the US are all under threat if those countries decide "why should we give all this money to a French company when we could build these trains ourselves?".
Protectionism destroyed the British national morale in the 1970s. The country was weighed down with an unsustainable burden of uncompetitive industries, propped up by the public purse because it was too politically painful to allow them to decline. The resulting swing to Thatcherism resulted in a swift and brutal end to those industries - rather than a managed decline, they were simply culled off, with utterly traumatic effects on a generation of workers who weren't prepared for it.
National morale based on an economic sleight-of-hand is a poor substitute for national morale based on industries that are genuinely capable of taking on the world and winning.
And, if we take a global / universal perspective it makes sense to optimise production where it’s most economical.
I guess my wider point is: we ignore nationalistic sentiment to our own detriment, as evidenced by Brexit. We probably ought to consider there is a spectrum rather than an either/or.
What do you mean by this? Could you explain this a bit please?
I wish we would stop with this meme, you should ask what they think in the UK of their private trains, I would prefer to keep the French train monopoly, at least it's cheap and it works.
Sure you might prefer, but your personal preference doesn't change the fact that protectionism is bad in the long term, and illegal in the EU.
It all depends, some industries are just not working privately, the privatization of electricity in France was also a failure for example. The privatization of the post system was also a failure but it matters less since the postal system is less important nowadays.
For the trains, the core issue here is that the network has a value has a whole, if you start to remove the unprofitable parts, it reduces the value of it as a whole. It would be like having only highways, it would not be useful even if it's where you have the most traffic.
> and illegal in the EU.
Well, then you understand why some people become anti-EU when their public service fails and politicians tell them it's perfectly normal and because of some EU policy.
That doesn't have anything to do with protectionism. Are you confusing protectionism with state-owned companies?
> For the trains, the core issue here is that the network has a value has a whole
I'm talking about train sets, not rail networks.
Rail networks in the EU are becoming open as well (which is the point of the article, in case you didn't read it), so SNCF is having, due to competition, to buy more efficient train sets to be able to compete with potential new entrants.
Which is good for society.
No I don't, I'm going to explain how the public train service works, it works by subsidising the unprofitable parts with the profitable parts. Which private train company would like to take an unprofitable train line? If you can find one, good luck.
> Rail networks in the EU are becoming open as well (which is the point of the article, in case you didn't read it), so SNCF is having, due to competition, to buy more efficient train sets to be able to compete with potential new entrants.
Since then the SNCF closed a lot of local train stations, reducing the attractivity of the train in France and threatening the train system as a whole, the same policies are producing the same consequences, I wish people would learn from the mistakes of the past one day.
It's just bad federal policy, both in terms of allocation of funds for transportation as well as in terms of how they lead these publically owned train operators. And it's even possible to argue it's fine (I don't think it is), which is why it happened in the first place. Also: cars.
France, if anything, has always been even more enamored with fast trains to the detriment of anything else - iirc the TGV has a much more exclusive network than the ICE. That's money not spent on rural networks.
Anyway, I think the EU has very little to do with it. I've been following the debate for a long time and it's basically never come up.