The newly-elected French president has sparked a row with Italy over the sale of a shipyard, raising questions over his pro-European credentials.
Rome had agreed to buy a majority stake in the French shipyard but President Emmanuel Macron wants shared control. Officials from both countries failed to reach an agreement on Tuesday. But they hope to conclude talks by the end of September.
Under the former French President Francois Hollande, France agreed to sell a controlling stake in STX to Italy’s Fincatieri. The agreement in principle, reached earlier this year, said that Fincantieri, which is owned by the Italian government, would acquire 66.66 percent of the share capital of STX France, the Italian news agency ANSA reported.
But Macron, who was elected in May, decided to review the deal and announced last week he was ready to scrap the agreement and temporarily nationalize the shipyard.
“It’s ironic this thing would happen because when Hollande was president he approved the sale of STX to Fincantieri,” Marco Elser, head portfolio manager at Lonsin Capital, told CNBC on Wednesday.
He added that in order to promote jobs in France, Macron came up with the idea to increase France’s control of the shipyard. An Ifop poll showed Sunday that 70 percent of the French people support Macron’s decision.
France has told Italy it can name the chairman of STX but both sides will have a 50-50 share.
Carlo Calenda, Italian minister for economic development, said the offer wasn’t good enough, the Financial Times reported.
France agreed not to sell STX France to a third party until the end of September and considers Fincantieri as its preferred option.
“I am convinced there’s going to be an accord before the September 27 meeting between Macron and (Italian Prime Minister Paolo) Gentilioni,” Elser from Lonsin Capital told CNBC.
“The solution is going to be a majority stake of the company is going to go to Fincantieri but there’s going to be some very significant provisions to guarantee employment, which is really at the heart of Macron’s political agenda,” he said.
He added that France has had an enormous shopping spree in Italy with the country’s most famous luxury brands, from Bulgari to Gucci, in the hands of French companies.
France’s Macron nationalizes shipyard, provokes row with Italy