The supposed benefits of unique capital
Merging with the NYSE will give greater visibility to companies listed on Euronext: Anglo-Saxon and Asian investors, who are familiar with the NYSE brand, will be more sensitive to these values. Liquidity on Euronext should also increase. Currently, very few members of the NYSE are also members of Euronext, and vice versa. Furthermore, as Euronext and the NYSE share the same IT trading tools, arbitrageurs will be able to operate on both markets in parallel. The increased presence in Paris of these important players will increase, for investors, the chances of finding counterparties at the best price for their sales or purchase offers. Staying isolated puts us at risk of being marginalized. Today we have the chance to sign an equal parity agreement with the NYSE. If we let this opportunity pass, in two or three years, global stock exchange networks established in the United States, Asia and Europe will have appeared. We also risk being competed by alternative platforms set up by banks. We absolutely must reach a critical size to continue to lower our costs and attract customers, and therefore liquidity. (Euronext12/2006)
It is surprising that the creation of a huge transatlantic stock exchange entity is justified by the protagonists in an entirely flat and technical way, as if it were just a business like any other, with its margins, its costs. , its dividends… also by resorting to the usual corporate rhetoric according to which “we” are at war, we must “grow” and not allow ourselves to be “marginalized”. We don’t know much more after hearing this than we did before.
However, there is somewhere “someone” who calculates, evaluates, guides, inspires and decides. An interest that seeks to expand or consolidate. We can think that this operation reveals a certain panic of French capitalism (that is to say of a group of people) which fights for its positions without bothering with principles or a social project.
The Stock Market is not a business like any other. It contributes to the financing of businesses, and therefore to the functioning of the economy. An international merger of market players cannot be reduced to savings in IT costs in the limited interest of their shareholders. It has potential long-term consequences for the entire economy and for society.
And yet, there is a profound sluggishness of reflection and debate on this subject – both in the economic and political worlds and in the academic world. Most of the highly divided listed companies remained inert. The only political reactions were in terms of economic patriotism or snubs to European state integration. As for economists, they have generally taken up the pseudo-rational discourse on the technical advantages of fusion.
However, we can think that the long-term consequences of this merger will not only be positive. For example, the fact that companies are listed on a single transatlantic market could allow economic risks to spread even more quickly. Whatever precautions have been taken, the American model of accounting and governance will likely become an even more influential benchmark. However, this model is oriented towards short-term profitability, which encourages cuts in employment and investment.
This would further hamper the emergence of a model of social capitalism in Europe.
