[Annotated] Remember corporate Europe? It wants to be noticed again

Emmanuel Macron is helping revive the grandest idea in^[각주:1] European business

When Emmanuel Macron first started work as a mergers-and-acquisitions banker at^[각주:2] Rothschild in Paris in 2008, technicians of^[각주:3] the trade were not impressed. “He did not know what EBITDA^[각주:4] was,” sniffed^[각주:5] a former colleague, according to the Financial Times (it is a measure of company profits). Yet Mr Macron had ideas and made things happen, and four years later persuaded Nestlé to spend $12bn buying Pfizer’s nutrition business.

Now that he is France’s president, Mr Macron is trying to revive the grandest idea of all in European business: creating continental champions capable of taking on^[각주:6] American and Chinese firms. It is an ambitious mission that will prove highly frustrating^[각주:7].

Mr Macron laid out his vision at^[각주:8] the Sorbonne in Paris in September, promising a “re-foundation of Europe”, and that he would bolster^[각주:9] its “industrial and monetary power”. The same day Alstom, a French transport firm^[각주:10], agreed to merge with^[각주:11] the transport arm of^[각주:12] Siemens, a German rival. The combination will have $18bn of sales, placing it second only to^[각주:13] CRRC, a Chinese state-run monster^[각주:14] that sells locomotives around the world^[각주:15]. Joe Kaeser, Siemens’s boss, spoke of putting “the European idea to work” to create a “European champion”.

That label^[각주:16] sounds corny^[각주:17] but it used to make bosses tingle with excitement^[각주:18]. A wave of intra-European deals followed the creation of the single market and the euro, accounting for 31% of global M&A activity between 2000 and 2005, according to Dealogic, a data provider. Some were orchestrated by^[각주:19] governments—for example, the creation of EADS, a plane manufacturer (now Airbus) in 2000. Others were backed by investors—such as Vodafone’s takeover of^[각주:20] Mannesmann in the same year, which created a mobile-phone giant. But the common thread was^[각주:21] that having a huge home market^[각주:22] would give European firms the kind of economies of scale^[각주:23] enjoyed by American companies.

Europe’s long crisis, which began when European bond yields^[각주:24] spiked in^[각주:25] 2010 (and which, hopefully^[각주:26], ended with^[각주:27] Mr Macron’s election in May) paralyzed^[각주:28] this urge to^[각주:29] consolidate^[각주:30]. Pan-European^[각주:31] deals were just 12% of global M&A last year. Worried about the euro’s stability and enticed by^[각주:32] faster growth in emerging economies^[각주:33], European companies have invested more elsewhere. Meanwhile, American and Chinese firms have used deals and organic^[각주:34] expansion to^[각주:35] get even bigger in their domestic markets.

It is bad enough that Europe does not have any technology giants on the scale of an Amazon or Alibaba, but these trends mean that even the region’s bog-standard^[각주:36] old-economy firms are^[각주:37] relatively small. The median listed^[각주:38] European company is 78% as big as the median American one (these figures are for the top 500 firms in each geographical area, and use a blend of profits^[각주:39], book value^[각주:40] and market value to^[각주:41] measure size, using Bloomberg data). If you exclude^[각주:42] Switzerland and Britain, which have lots of large companies and which either are not, or soon will not be, in the European Union (EU), the median EU firm is just 48% of the size of the median American one. Chinese firms have almost caught up^[각주:43]: the median company there is 94% as big as the median EU firm and within a couple more years will probably be larger.

Europe has a long tail of journeymen in^[각주:44] some industries, including banking^[각주:45], media, defence^[각주:46] and carmaking^[각주:47]. For example, Peugeot produces one third of the cars that General Motors does. ProSiebenSat, a German broadcaster^[각주:48], has sales that^[각주:49] are less than a tenth of Disney’s. Ericsson is less than half the size of Huawei, a Chinese telecoms-equipment firm^[각주:50]. Size is not everything. But a lack of scale, and the costs of operating in lots of midsized^[각주:51] countries, may help explain corporate Europe’s weak return on equity^[각주:52], which at 9% lags behind^[각주:53] America (13%) and China (10%).

With his aim to foster greater scale^[각주:54], Mr Macron should be pushing on^[각주:55] an open door^[각주:56]. Profits are rising, making managers bolder, and Chinese and American predators are^[각주:57] sniffing around^[각주:58], giving a sense of urgency^[각주:59]. And over time the EU may try to deepen the single market by^[각주:60] harmonizing^[각주:61] corporate-tax rates^[각주:62] and strengthening^[각주:63] its banking union. All this will make pan-European deals more likely.

Yet there are two stumbling-blocks^[각주:64]. First, prickly^[각주:65] national sensitivities. The Alstom-Siemens combination^[각주:66] will have a German controlling shareholder^[각주:67] but its headquarters in^[각주:68] France. Fingers crossed that^[각주:69] this fudge works^[각주:70]. Elsewhere, European unity appears scarce^[각주:71]. A proposed $34bn takeover of Abertis, a Spanish company, by Atlantia, an Italian firm, would create the world’s largest toll-road^[각주:72] operator^[각주:73]. But a blocking counter-bid^[각주:74] has been made by ACS, a Spanish firm, with the tacit^[각주:75] backing of^[각주:76] Spain’s government. Meanwhile, Vincent Bolloré, a billionaire who controls Vivendi, a French media firm, wants to create a continental powerhouse^[각주:77] and has tried to make inroads into^[각주:78] Italy, buying stakes in^[각주:79] Telecom Italia and Mediaset, a media business controlled by Silvio Berlusconi, a former prime minister. But Mr Bolloré has run into a wall of^[각주:80] regulatory^[각주:81] and political hostility^[각주:82].

Pleasing the people, and shareholders too

The other stumbling-block is winning over shareholders^[각주:83]. Pan-European deals are risky. Of the 100 largest bids, 30 have collapsed, often due to^[각주:84] political rows^[각주:85]. To justify paying a takeover premium^[각주:86], firms need to cut costs, but this can be hard for political reasons. The union of Finland’s Nokia and France’s Alcatel, two telecoms-equipment firms, backed by Mr Macron when he was finance minister^[각주:87] in 2015, has since incurred^[각주:88] his wrath by^[각주:89] trying to cut jobs in France. Lax^[각주:90] antitrust^[각주:91] enforcement^[각주:92] has let American firms form oligopolies^[각주:93] and pass the gains to shareholders, not consumers. But European regulators are, rightly^[각주:94], tougher, so deals that create windfalls for^[각주:95] investors are harder to get approved.

Mr Macron’s instinct^[각주:96] is correct. European firms have lost their seat at the top table of global business. But if the aspiration of^[각주:97] creating a new cohort of^[각주:98] European corporate champions is desirable^[각주:99] in theory^[각주:100], it is daunting in practice^[각주:101].

1. revive ; (참고: revival) 1. 활기를 되찾다[되찾게 하다], 회복[소생]하다[시키다] ;; 2. [타동사][VN] (다시 사용되거나 행해지도록) 부활시키다 [본문으로]
2. merger and acquisition ; [명사] (경영) 합병 매수, 인수 합병(약어 M&A). [본문으로]
3. technician ; 1. 기술자, 기사 ;; 2. (예술・스포츠 등에서) 기술[기교]이 뛰어난 사람 [본문으로]
4. EBITDA ; [명사] (경제) 에비타, Earnings Before Interest, Tax, Depreciation and Amortization [본문으로]
5. sniff ; 3. 콧방귀를 뀌다[뀌며 말하다] [본문으로]
6. take on ; [동사] 떠맡다; 고용하다; 태우다; 떠들어대다, 흥분하다; 인기를 얻다; …와 대전[대결]하다. ;; 동의어 ; undertake, assume; employ, hire; carry on board; become excited; become popular; [본문으로]
7. frustrating ; [형용사] 불만스러운, 좌절감을 주는 [본문으로]
8. lay out ; [동사] 펼치다; 투자하다; 질책하다; 때려 눕히다; 설계[계획]하다. ;; 동의어 ; extend at length; spend, contribute; reprimand; knock down; arrange, plan, [본문으로]
9. bolster ; [타동사][VN] ~ sth (up) 북돋우다, 강화[개선]하다 [본문으로]
10. transport ; 3. [U] (trans・por・ta・tion 美, 英) (특히 英 또한) 운송, 수송, 운송업 [본문으로]
11. merge with ; ~와 통합, 합병되다 [본문으로]
12. arm ; 6. OF ORGANIZATION | [주로 단수로] ~ (of sth) (조직의) 부문 [본문으로]
13. place sth second only to... ; ...다음으로 2위, 두번째를 차지하다 [본문으로]
14. state-run monster ; 흐름상 "국영 거대 기업" [본문으로]
15. locomotive ; [명사] 기관차 ;; 미국식 [|loʊkə|moʊtɪv] 영국식 [|ləʊkə|məʊtɪv] [본문으로]
16. label ; 2. (못마땅함) (사람・물건의 성격 등을 묘사하는) 딱지[꼬리표] [본문으로]
17. corny ; [형용사] corn・ier , corni・est (비격식) 진부한 [본문으로]
18. tingle with excitement ; 흥분으로 안절부절 못하다 ;; tingle ; 2. ~ with sth (어떤감정이)마구 일다 [본문으로]
19. orchestrate ; 2. (복잡한 계획・행사를 세심히 또는 은밀히) 조직하다 [본문으로]
20. takeover ; [C , U] 1. 기업[경영권] 인수 [본문으로]
21. the common thread (of the stories) ; (이야기의) 공통된 맥락. [본문으로]
22. home market ; 국내시장 [본문으로]
23. economies of scale ; (경제) 규모의 경제 ((생산 요소 투입량의 증대에 따른 생산비 절약 또는 수익 향상)) ;; 대량 생산에 의한 원가 절감, 스케일 메리트 [본문으로]
24. bond yield ; (증권·금융) 채권수익률. [본문으로]
25. spike ; 4. [자동사][V] (특히 美) (가치가) 급등하다 [본문으로]
26. hopefully ; 1. 바라건대 ;; hopefully가 이런 뜻으로 쓰이는 경우가 가장 흔하긴 하지만 이런 쓰임은 비교적 새로운 것이고 이것을 옳지 않다고 여기는 사람들도 있다. [본문으로]
27. end with ; …으로 끝나다 [본문으로]
28. paralyze ; 2. 무력[무능]하게 만들다; 쓸모없게 만들다; 무효가 되게 하다 [본문으로]
29. urge ; [명사] ~ (to do sth) (강한) 욕구, 충동 [본문으로]
30. consolidate ; 2. (전문 용어) 통합하다[되다] [본문으로]
31. pan- ; (형용사・명사에서) <‘…을 다 포함하는', ‘… 전체와 관련된'의 뜻을 나타냄> [본문으로]
32. entice ; [동사] ~ sb (into doing sth) (보통 무엇을 제공하며) 유도[유인]하다] [본문으로]
33. emerging economies ; [명사] 개발 도상국 (syn. developing countries) [본문으로]
34. organic ; 4. (격식) 유기적인 ;; 5. (격식) 서서히[저절로] 생기는, 자연스러운 [본문으로]
35. expansion ; [U , C] 확대, 확장, 팽창 [본문으로]
36. bog-standard ; [형용사] (英 비격식) 평범한, 흔한 ;; ordinary; with no special features [본문으로]
37. old-economy ; 구경제 ((제조업 중심의 경제 체제; cf. NEW ECONOMY)) [본문으로]
38. median ; 형용사[명사 앞에만 씀], (전문 용어) 1. 중간값[중앙치]의 ;; 미국∙영국 [|mi:diən] [본문으로]
39. blend ; [명사] 2. [주로 단수로] (보기 좋거나 유용한) 조합 [본문으로]
40. book value ; [회계] 장부 가격 ((略 bv))(opp. market value); 1주(株)당 순자산 [본문으로]
41. market value ; [명사] 시장 가치, 시가 [본문으로]
42. exclude ; 1. ~ sth (from sth) 제외[배제]하다 [본문으로]
43. catch up ; 2. (정도나 수준이 앞선 것을) 따라잡다 [본문으로]
44. journeyman ; (pl. -men / -mən /) 1. (과거 도제 수업을 마치고 남 밑에서 일하던) 장인 ;; 2. 그냥 보통 솜씨의 장인, 제구실은 하는 정도의 일꾼 [본문으로]
45. banking ; [U] 은행업무 [본문으로]
46. defence ; 3. PROTECTION AGAINST ATTACK | [U] (한 국가의) 방위[국방] 체제 [본문으로]
47. carmaking ; The manufacture of automobiles [본문으로]
48. broadcaster ; 1. 방송인, 방송 진행자 ;; 2. 방송사[국] [본문으로]
49. have sales ; 매출을 올리다 [본문으로]
50. telecom equipment ; a communication system for communicating at a distance [본문으로]
51. midsized ; [ADJ] You use midsized or midsize to describe products, cities, companies, and other things that are neither large nor small. [본문으로]
52. return on equity ; [회계] 자기 자본 수익률 ((순이익을 자기 자본으로 나눈 비율; 略 ROE)) [본문으로]
53. lag[fall] behind ; …보다 뒤떨어지다, 뒤(처)지다, (발달이) 낙후되다 [본문으로]
54. foster ; 1. [타동사][VN] 조성하다, 발전시키다 [본문으로]
55. push on ; (여정·활동을) 계속 하다[나아가다] [본문으로]
56. open door ; [sing.] (어떤 일의 발생・접근・정보 이용 등의) 허용[개방] [본문으로]
57. predator ; 2. (못마땅함) (비유적으로) 포식자, (약한 사람들을 이용해 먹는) 약탈자 [본문으로]
58. sniff around[round] ; (특히 비밀 정보를 알아내기 위해) 코를 킁킁거리며 다니다 [본문으로]
59. a sense of urgency ; 위기감, 절박감, 긴박감 [본문으로]
60. deepen ; 4. [타동사][VN] (지식・이해를) 깊게 하다[심화시키다] [본문으로]
61. harmonize ; 2. [타동사][VN] (시스템・법규를 다른 나라・조직과) 맞추다[비슷하게 만들다] [본문으로]
62. corporate tax rate ; 법인세율 [본문으로]
63. strengthen ; [동사] 강화되다, 강력해지다; 강화하다, 더 튼튼하게 하다 [본문으로]
64. stumbling block ; [명사] ~ (to sth) | ~ (to doing sth) 장애물, 방해물, 고민거리 [본문으로]
65. prickly ; 3. (비격식) (사람이) 쉽게 발끈 하는 ;; 4. (결정・쟁점 등이) 다루기 힘든, 골치 아픈 [본문으로]
66. combination ; 2. [U] 조합[연합] (행위) [본문으로]
67. controlling shareholder ; (경제) 지배주주 [본문으로]
68. headquarters ; [U+sing./pl. v., C] (pl. head・quar・ters) (약어:HQ) 본사[본부] (직원들) [본문으로]
69. fingers crossed that ; ~하는것을 기원하다, 바라다 [본문으로]
70. fudge ; 2. [sing.] a fudge (특히 英) 임시방편 ;; [U] 꾸민 일; 허튼소리(nonsense) [본문으로]
71. scarce ; [형용사] scar・cer , scar・cest 부족한, 드문 [본문으로]
72. toll road ; 유료 도로 [본문으로]
73. operator ; 3. [흔히 합성어에서] <특정한 사업을 하는 사람・회사> [본문으로]
74. counter-bid ; [명사] (상업) 대항적 매입 주문 ((경매 시장 등에서)) [본문으로]
75. tacit ; [형용사] (주로 명사 앞에 씀) 암묵적인, 무언의 [본문으로]
76. backing ; 1. [U] 지원 [본문으로]
77. powerhouse ; 1. 유력[실세] 집단[기관] [본문으로]
78. make inroads into ; ~을 잠식해 들어가다[감소시키다], …을 먹어 들어가다, …에 침입하다 [본문으로]
79. stake ; 3. [C] 지분(持分) [본문으로]
80. run into ; 2. (곤경 등을) 만나다[겪다] [본문으로]
81. regulatory ; [형용사] (주로 명사 앞에 씀) (산업・상업 분야의) 규제[단속]력을 지닌 [본문으로]
82. hostility ; 2. [U] ~ (to/towards sth) (생각・계획 등에 대한) 강한 반대[반감] [본문으로]
83. win (sb) over ; 설득하다, 자기편으로 끌어들이다, …의 지원이나 동정을 얻는 데 성공하다 [본문으로]
84. due to ; 1. (《be동사·명사 뒤에서》) …에 기인하는, …때문에 ;; 2. (구어) (《부사적》) …때문에(because of) [본문으로]
85. row ; (비격식 특히 英) 1. [C] ~ (about/over sth) (사람・조직 등 간의) 심각한 의견 대립 ;; 2. [C] (사람들 사이의) 말다툼[언쟁] ;; 3. [sing.] 소란, 소동 [본문으로]
86. premium ; 2. 할증료 [본문으로]
87. finance minister ; [명사] 재무 장관 [본문으로]
88. incur ; (-rr-), (격식) 1. (좋지 못한 상황을[에]) 초래하다[처하게 되다] [본문으로]
89. wrath ; [U] (구식 또는 격식) (극도의) 분노, 노여움 [본문으로]
90. lax ; 1. (못마땅함) (일・규칙・기준 등에 대해) 느슨한[해이한] [본문으로]
91. antitrust ; [형용사] (명사 앞에만 씀) 법이 독점 금지의 ;; 미국·영국 [|ӕnti|trʌst] [본문으로]
92. enforcement ; 1. (법률의) 시행, 집행 ;; 2. (복종 등의) 강제 ;; 3. (의견 등의) 강조 [본문으로]
93. oligopoly ; [U] (경제) 소수 독점, 과점(寡占) ((소수 매주(賣主)의 시장 지배)) ;; 미국식 [ɑ̀liɡɑ́pəli] 영국식 [ɔ́liɡɔ́-] [본문으로]
94. rightly ; 1. 당연히, 마땅히 ;; 2. 올바르게, 옳게, 제대로 [본문으로]
95. windfall ; 1. 우발적인 소득, 뜻밖의 횡재 [본문으로]
96. instinct ; 2. ~ (that…) 직감 [본문으로]
97. aspiration ; 1. [C , U] [주로 복수로] ~ (for sth) | ~ (to do sth) 열망, 포부, 염원 [본문으로]
98. cohort ; [C+sing./pl. v.] 1. (전문 용어) (통계적으로 동일한 특색이나 행동 양식을 공유하는) 집단 ;; 미국식 [|koʊhɔ:rt] 영국식 [|kəʊhɔ:t] [본문으로]
99. desirable ; 1. ~ (that)… | ~ (for sb) (to do sth) (격식) 바람직한, 호감 가는, 가치 있는 [본문으로]
100. in theory ; 이론상[원칙적]으로는 [본문으로]
101. in practice ; 실제는, 실전에 [본문으로]