AS WE closed for press, the future of ailing industrial titan Alstom was hanging in the balance. Around six weeks had passed since the French government and a group of banks agreed a rescue package on August 5 (RG 9.03 p594), which was to be endorsed by shareholders on September 24. The plan needed to be agreed with the European Commission, but details were only sent to Brussels on August 8. The Commission’s concerns about state aid distorting the market were confirmed on September 5 when Competition Commissioner Mario Monti insisted that the rescue could not proceed without the Commission’s approval.

French Economics Minister Francis Mer met Monti for negotiations on September 9, and Alstom management put their case to the Commission three days later. To no avail, for on September 17 the Commission opened a detailed investigation into the rescue package and granted Monti powers to issue a suspension order banning the French government from going ahead. This was to take effect at midnight on September 22 ’unless the French authorities undertake publicly not to take any steps involving, automatically and irreversibly, the acquisition by the French state of a stake in the Alstom group without the Commission’s prior approval under the state aid rules’. Alstom shares were suspended on September 17.

At stake are Alstom’s rail interests in 17 countries, together with the group’s activities in energy, power distribution and shipbuilding. One option under discussion was a compromise package that would see the French government lend Alstom €800m in the short term.