Why Europe Wants to Pump Up Companies to Make ‘National Champions’

“National champions” are back in fashion, particularly in Europe. The term is code for government support for home-grown corporate powerhouses as a way to give them an edge over outside competitors and create jobs, drive exports and fuel economic growth. The European Union worked for decades to stamp out state aid and pry open markets for electricity, phone services and air travel. But now as national leaders struggle with growing populism at home and what they see as unfair competition from China they want more leeway to act. The risk is that intervening and building barriers could scare away capital, stifle competition and smother innovation just when companies need it most.

A national champion can be a provider of key public services, such as electricity, transport or postal services, that states protect in an effort to make sure citizens have easy, cheap access to them. It can also be an industrial leader in its field, such as making cars or power plants, which government officials try to protect and nurture so it can generate jobs and profits at home while setting out to conquer the world. The concept has expanded to internet and technology firms and can cover any company a country deems important to its national interest or security – or pride. For example, Huawei Technologies Co. has been encouraged by China to expand globally, taking on markets previously dominated by Western suppliers.