Reuters reported that it is unwise for governments to intervene to avoid the closure of steel plants in the euro zone's oversupplied market.
The chief executive of Austrian steelmaker Voestalpine said that in the last few weeks both the French and Italian governments have considered nationalising steel plants facing closures due to falling demand, overcapacity and loss of competitiveness.
In the euro zone, steel production currently exceeds demand by about 50 million tonnes a year, or about 30%
"European politics and politicians have to see that business is a dynamic process, companies and products come up, peak and then phase out," Wolfgang Eder, who is also the president of the European steel industry body Eurofer said in a telephone interview.
"It does not make sense to artificially extend their life time by pumping in money which does not help them to survive in the long run. The danger of protectionism, which is always linked to subsidies, is increasing," he added.
The French government backed away last week from a threat to nationalise a steel plant in Florange, only after it secured promises from its owner, the world's largest steel producer, ArcelorMittal , that it will invest and avoid forced layoffs.
Italy's industry minister said last week the state could take over the ILVA steel plant from the current owners, the privately held Riva Group, if environmental and technological upgrades set out by government were not made.
