Former EU antitrust chief warns of dangers of national champions

By Foo Yun Chee

PARIS, March 6 (Reuters) - Former European Union antitrust chief Mario Monti on Wednesday warned creating national champions to help European businesses compete with rivals from China and elsewhere could face pushback from other countries and weaken competition enforcers' power.

The comments by Monti, former Italian prime minister and the European Commission's competition commissioner from 1999 to 2004, come as his compatriots Mario Draghi and Enrico Letta are due to present reports on ways to revive the EU's competitiveness.

Both reports, commissioned by the EU executive, are expected to stress the role of state aid and more protectionist measures to help European businesses compete against Chinese and other rivals in key sectors.

Monti said European national champions could face blowback in non-EU countries.

"It is rather likely that (European) champion will not be authorised in other countries," Monti told an OECD conference.

He referred to the transatlantic row in 2001 when he blocked GE and Honeywell's merger despite U.S. authorities' approval of the deal, sparking criticism that the EU was more interested in protecting local players than promoting competition.

"In 2001, we blocked the GE-Honeywell merger for good reason under our laws. Then of course they could not operate, had they merged, in the broad EU market," Monti said about the decision that had led GE and Honeywell to call off the merger also in the U.S.

"So Europeans who want European champions, go ahead, it's a legitimate goal," he said.

However, Monti warned that forcing competition authorities to misapply their powers to create national champions could compromise their objectivity, and would "most likely not have the desired effect". (Reporting by Foo Yun Chee; editing by Milla Nissi)