January 31, 2008	Thursday	Muharram 21, 1429

PARIS, Jan 30: France has vowed to defend its flagship bank Societe Generale from any hostile takeover, but analysts warned on Wednesday the state has limited power to protect the troubled giant from market predators.

With France’s third-biggest bank left vulnerable to a takeover by a 4.8-billion-euro ($7.1bn) rogue trader scandal, the government fired a warning shot on Tuesday to would-be bidders.

Speaking in parliament, Prime Minister Francois Fillon insisted Societe Generale should remain a “great French bank” and that the government would fight off “hostile raids”.

France’s top two banks BNP Paribas and Credit Agricole are said to be poised to pounce on Societe Generale but Britain’s HSBC and Barclays, Germany’s Deutsche Bank, Spain’s Banco Santander and Italy’s UniCredit have also been cited as potential bidders.

“Banks play an important role in the economy. They have an intimate knowledge of a country’s economic and industrial fabric,” said economist Elie Cohen, who said protectionism was widespread in the European banking sector, particularly in Italy and Germany.

“All states intervene, but they do so quietly. Ours is the only one to make a public show of it,” he said.

Successive French governments have invoked the notion of “economic patriotism” to justify bailing out French companies and stopping foreign takeover bids in strategic sectors.

Most recently the state tried to block the takeover of French steel giant Arcelor by India’s Mittal in 2006 although it eventually bowed to market forces and let the deal go ahead.

The pro-government Le Figaro newspaper argued in favour of state intervention in the Societe Generale case on Wednesday.

“Even if its approach may appear abrupt or clumsy... it is not indecent for the government to take an interest in the fate of one of the greatest French banks. Societe Generale is not just any old object.” —AFP