The lamps are going out all over Europe. OK, a joke in poor taste. The outbreak of open warfare between political leaders prompted by consolidation among Europe's energy utilities none the less invites comic parallels.
With characteristic, over-the-top flamboyance, it took the Italian economy minister, Giulio Tremonti, to reduce matters to the realms of farce by angrily comparing France's hostility to Enel of Italy to the nationalism seen in the run up to the First World War. "Then no one wanted war, but war happened", Mr Tremonti is reported as saying in one outburst.
Sacré bleu! No wonder the French have been forced to rush forward plans for a defensive merger of Suez, the French-based power giant, with the state -owned Gaz de France. It must have been the sight of the Italian hordes massing in the Alpine passes that did it.
Up until now it has been fear of entrenched union opposition to what is in effect a privatisation which has kept the French government from selling Gaz de France to Suez. Yet even a union backlash seems preferable to the Italians. Call out the carbinieri. Man the cannon. Mobilise the Foreign Legion. What on earth has happened to the European ideal that it can be split asunder by a display of such shameless national protectionism?
This is ugly, as another member of the Italian government put it yesterday, and it's going to get uglier still.
It's a view that many of us, looking at the fisticuffs from these liberalised shores, might share. Yet I am not altogether sure it is the correct one. The French have done themselves few favours by depicting such absurdities as Danone, a yogurt producer, as examples of vital strategic industrial interest which must be saved from foreign takeover at all costs. Little short of racist opposition to Mittal Steel's assault on Arcelor has only compounded this stereotypical view of French obstinacy.
Yet the truth is that both from an industrial, and possibly a shareholder value perspective too, the Suez tie-up with Gaz de France seems preferable to any takeover by Enel. At a stroke, France achieves the previously impossible feat of privatising Gaz de France, a necessary first step in the liberalisation of French energy markets.
You may disagree with the logic of putting gas distribution together with electricity production, but by giving Suez a substantial new customer base, it should enable more effective competition to the monopoly electricity company, Electricité de France. The synergies are also likely to be greater than those available to Enel.
Yogurt seems an oddly inappropriate choice of industry for any government, however nationalistic, to draw its line in the sand over, but even Britain wouldn't these days argue with the idea that security of energy supply is of some national importance. Has liberalisation, corporate break-up and foreign takeover served Britain's energy needs well? It might have seemed the right approach when there were still plentiful supplies of cheap North Sea gas and oil to feed our needs. Now they are running out, it looks more questionable.
Small wonder that the Continentals look at our liberalised markets and say, thanks but no thanks. They've had years of reliance on imported energy, and have put in place storage capacity and long-term contracts to match. Belatedly Britain is being forced to catch up. The market won't supply a new generation of nuclear power stations, so the Blair government is being forced to consider state intervention to do the job instead.
One consequence of our market -driven approach to energy is that we have no "national champions" to play the European consolidation game. The closest we have is National Grid, yet not even this company, owner of the backbone electricity and gas distribution systems, is big enough to punch with the big boys in the race for European domination. Only those already fat on integrated national monopoly have a cheque book sufficiently large to play.
National Grid would dearly love to expand into Europe, but it cannot find the opportunity or the value. Instead, it has been forced to go shopping in the United States, which after yesterday's takeover of KeySpan Corp for $7.3bn, makes National Grid bigger in America than it is back home. Is this not empire building too, smaller in size than E.ON's cross border bid for Endesa of Spain, but essentially the same thing? Perhaps, but with war in Europe, the US might prove the best place to be.
Sarin needs some good luck at Vodafone
Arun Sarin, chief executive of Vodafone, certainly knows how to bolster his defences. With alternating calls for a complete change in strategy on the one hand and his head on the other ringing in his ears, this might not have been thought an exactly opportune moment to announce a £28bn writedown.
As David Cumming, head of UK equities at Standard Life Investments and a long-standing critic of Mr Sarin, was swift to point out, there has been precious little in the way of good news from Vodafone since Mr Sarin took over two and a half years ago. Just lately, the flow seems to have been unrelentingly bad. Disaster in Japan, repeated profit warnings, an extra £5bn in tax charges - what more could possibly go wrong?
As it happens, the latest blow cannot be blamed on Mr Sarin. The writedowns relate to German assets, a throwback to the hugely inflated price Vodafone paid for Mannesmann at the tail end of the telecoms boom.
With the old guard that was responsible for this takeover now almost wholly gone, the board has been able to engage in some long overdue book keeping adjustments to reflect the humbler circumstances to which the mobile phones industry has been reduced. Still no writedown of the 3G licences, but then the company must be allowed to keep some of its pride.
Would Vodafone have been better off had it never bought Mannesmann in the first place? It's hard to know, but since Vodafone was at the time paying in an equally inflated currency - shares - perhaps not. As I say, none of this can be laid at Mr Sarin's door. Nor can he be faulted for gripping the problem.
To the contrary, to have carried on sweeping it under the carpet would have been doubly reprehensible. Yet he needs a stroke of good luck soon. All this outpouring of bad news makes Mr Sarin look accident prone, and only gives succour to his enemies, who want him gone and the company broken up.
C&W: time to step off the bus
"We trained hard ... but it seemed that every time we were to form up in teams, we would be re-organised. I was to learn later in life that we tend to meet any new situation by re-organising - and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency, and demoralisation". Petronius Arbiter, governor of Bithynia, who committed suicide in AD65, having fallen foul of Tigellinus, favourite of the Emperor Nero.
Employees of Cable & Wireless will know how he felt. The latest in an apparently interminable series of corporate reoganisations, all of which have so far profited C&W nothing, has been launched with an e-mail of such breathtaking crassness and insensitivity that you wonder about the mental stability of its author.
In it, John Pluthero, now head of the UK bit of C&W, congratulates his staff for working in an underperforming business "in a crappy industry". It's going to be hell for the next 12 months, he warns, and if anyone is worried that it all sounds very hard, "it's time for you to step off the bus. This is no longer a place for the timid".
Even allowing for irony, this sort of year zero, management claptrap will prompt neither loyalty nor hard work, only derision. Mr Pluthero should make no mistake about it, the few decent managers still left from previous culls will be stepping off the bus at the earliest possible opportunity.
C&W's acquisition last summer of Energis was always in my view misconceived and certainly overpriced. I doubt this latest reorganisation will do much to alter the prognosis, which, as Mr Pluthero points out in his e-mail, looks about as bad as it could be.Reuse content