* Top business lobbyist brands nationalisation "scandalous"
* Govt says lobbyist overlooking ArcelorMittal's business
* Company plans to shut Florange unless buyer found by Dec 1
By Nicholas Vinocur
PARIS, Nov 29 A top French business lobbyist
branded government plans to take over ArcelorMittal's
Florange steelworks as "scandalous" on Thursday, leading the
government to accuse her of overlooking the company's practices.
The government is locked in talks with ArcelorMittal on the
fate of two blast furnaces at the site that the company plans to
shut down unless it can find a buyer by Saturday.
The case has been seen as a test of Socialist President
Francois Hollande's vow to stem a glut of layoffs and reverse
years of industrial decline in France.
But MEDEF business lobby chief Laurence Parisot said
nationalising the steelworks went against the principle of
private property, after Industry Minister Arnaud Montebourg said
the government was ready for a temporary takeover.
"This declaration is purely and simply scandalous," Parisot
told RTL radio. "To undermine the principle of private property
in this haphazard way is very serious and, what's more, very
Parisot said such an operation would be an "expropriation",
leading the government to accuse her of overlooking flaws in
Luxembourg-based ArcelorMittal's business practices.
"I would have liked it if she used that word ('scandalous')
when the owner of this site was transferring a chunk of profits
from French sites over our borders, notably to Luxembourg,"
Budget Minister Jerome Cahuzac said.
Cahuzac said Parisot had ignored what he described as the
company's unfair winding down of an economically viable site to
The government is studying a temporary takeover of the site
in northeastern France, bringing in a private investor to
operate the steelworks and keep open the blast furnaces, which
employ 600 people out of a total 2,700 at the site.
Energy Minister Delphine Batho dismissed Parisot's comment
and noted the government had no plans to be a long-term owner.
Even right-wingers have rallied to the government's side on
Florange, with a former adviser to ex-president Nicolas Sarkozy
endorsing Montebourg's plans for the site.
Officials say that temporarily nationalising the site would
be legal and that ArcelorMittal would be compensated for any
forced sale. The state would become part-owner only until a
permanent owner was found.
Analysts said the move could clash with EU law, however.
"Quite how such a process would work is unclear," said Ben
Jones, France analyst at the Economist Intelligence Unit. "It
seems doubtful whether necessary legislation would be consistent
with European Union state aid rules."
Finance Minister Pierre Moscovici has sought to calm fears
the plan could herald a wave of nationalisations, saying it was
a one-off and appropriate given that CEO Lakshmi Mittal had
broken vows to ensure the site's viability.
ArcelorMittal denies breaking its commitments. Sources close
to the group say it had planned before its 2006 takeover by
Mittal to wind down operations including the two furnaces after