Politicians in Europe are wrong to embrace mega-mergers

NO COMPANY FOUNDEDEU in Europe in the past four decades has gone on to be worth over $100bn today. Entrepreneurs in America have managed the feat a dozen times, including the founders of Amazon, Cisco and Home Depot. China will soon have more such corporate leviathans than the European Union does. Angela Merkel of Germany and Emmanuel Macron of France are among those who think they have found a solution to this relative impotence: let European companies merge their way into the top leagues.Only the most hidebound politicians still yearn for the state-owned “national champions” of yore. But an increasing number see a need for “European champions” able to compete globally. Mrs Merkel has called for competition guidelines to be “modernised” so that European titans can emerge. Mr Macron says he wants the issue to feature prominently in the upcoming European election campaign. From eyeglasses to steelmaking, from stockmarkets to railways, proposed cross-border mergers are being backed by politicians as the only way to take on Chinese and American rivals (see ). That should set alarm bells ringing, for two reasons.