Arcelor’s U-turn, in particular, illustrates the failure of the French Government’s economic patriotism.

Lakshmi Mittal’s steelmaking group was a seen as the symbol of a new threat to Gallic status and sovereignty — the threat of being overtaken not just by the United States, but by developing nations as well. Never mind that Mr Mittal lives in London. Never mind that his group is based in the Netherlands. He is viewed in Paris as an Indian — the representative of a country whose aggressive capitalism could undermine France’s high-tax, generous welfare social model.

Such fears run deep in France and Dominique de Villepin, the Prime Minister, has sought to calm them by manoeuvring to prevent the takeover of French groups by foreign competitors. He waded into rumours that Pepsico was planning a bid for Danone, the food group, sought to rebuff a move by Enel, the Italian energy group, for Suez, the utility, and threw the French Government’s weight behind Arcelor’s battle to stay independent.

Although Arcelor has its headquarters in Luxembourg, its industrial base is in France, where it is seen a national champion.

However, M de Villepin’s determination to buck the markets is proving futile and damaging — futile because he does not have the power to do so and damaging because it prevents his compatriots from accepting the reality of globalisation.

After the French Government announced its opposition to Mittal’s offer, ministers realised their powerlessness. The decision lay not with them, but with Arcelor’s shareholders. They were acting like King Canute.

The ministers have since taken a more prudent line. However, the damage has already been done and the French public will view Mittal’s victory as a defeat for Paris — thus fuelling anxieties over la mondialisation.

Airbus is different to the extent that the French State holds a 15 per cent stake in the parent group, EADS. However, the lessons are the same — that state intervention is doomed in the modern world.

The man at the centre of the Airbus crisis is Noël Forgeard, a former industrial adviser to President Chirac, who imposed him as joint chief executive of EADS last year.

If EADS had been run along ordinary business lines, M Forgeard would have been unlikely to have got the job and the group would have been spared at least some of the turmoil that it has encountered this month.

However, EADS’s biggest handicap is a management structure designed by diplomats to preserve a Franco-German balance. It is structure that produces delays, bad communication and inefficiency. Its only advantage is that it enables politicians in France and Germany to claim EADS as one of their own champions — telling voters what they want to hear, and not what they need to hear.

MEN OF STEEL

Lakshmi Mittal, chief executive and founder of Mittal Steel. Trying to buy Arcelor since January. Embroiled in the cash-for- favours political row with Tony Blair in 2002 after Mr Blair wrote to his Romanian counterpart supporting a bid from Mittal for Romania’s state steel company

Aleksei Mordashov, chairman of Russia’s SeverStal. Chief financial officer at 27. Pushed aside his boss in 1996 and built SeverStal as a low-cost exporter. President Putin has hailed SeverStal as a business that understands its social responsibilities

Guy Dollé, 63, joined Usinor in 1980 and moved up the ranks to become senior vice-president in 1999. Says his best decision was proposing that Usinor should merge with Spain’s Aceralia and Luxembourg’s Arbed to form Arcelor

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