President Nicolas Sarkozys plan to lend 6 billion to the nations two carmakers, PSA/Peugeot-Citroen and Renault, sent a clear message to the rest of Europe: France really cares about its auto industry.
Other European governments immediately complained that Sarkozy was providing the kind of national aid that is forbidden under EU rules. But is that really relevant when the global auto industry is facing its worst crisis in decades?
Arent these complaints just a way to paper over the inability of other governments to act quickly and appropriately?
After Frances move, Europe is no longer a level playing field. Berlin and Rome will probably move quickly to even things out again.
Many European governments had called for a European Union intervention to help the auto industry. Its in the works, but nothing has happened yet. And it is questionable whether Brussels is able to move as quickly and decisively as is required in the current situation.
France did move quickly.
Maybe the aspirin Sarkozy is prescribing is not strong enough to cure PSA and Renault. The US is providing $17.4 billion to Ford Motor and General Motors. It realizes that, when the patient in intensive care, strong medicine is needed.
To Sarkozy, it was clear that waiting for things to get better was not an option.
The point is simple: A sector that employs more than 12 million people in the EU is worthy of getting some help. Take into account that revenue from motor vehicle taxes is close to 400 billion a year in the core EU and the case for action becomes even stronger.
Government assistance helps the entire automotive chain, from carmakers to parts and service suppliers to dealers.
These are unprecedented times that require unprecedented, bold decisions. France took them, Europe hasnt done anything yet.
National measures may be a form of protectionism. But, in the current crisis, they are better than doing nothing.