Alex Singleton | Journalist and political commentator

President Sarkozy is a curious hybrid. On some issues he is a free-marketeer, for example by advocating the loosening the 35-hour working week. But then he descends into protectionism when it comes to major French companies. For example, as Finance Minister, in 2004 he blocked train builder Alstom from being bought by Germany’s Siemens. German Chancellor Schroder described the situation as “infuriating”.

Such “infuriating” thinking resurfaced on Thursday when Mr Sarkozy successfully had deleted the words “free and undistorted competition” as one of the objectives of the EU in the outline of the constitutional treaty. That was a significant failure of Britain’s negotiating position. It caused a major panic at the European Commission, which enjoys the populism of policing anti-competitive behaviour and wants, rightly, to extend the single market. By Friday, thanks in part to the lobbying of Commission President Jose Manuel Barroso, and the work of by Italian premier Romano Prodi and Dutch premier Jan Peter Balkenende, a deal was secured to add a binding legal protocol giving the Commission the power to ensure free and undistorted competition after all.

Nevertheless, the powerful symbolism of having it as an objective has been lost, and the paragraph it comes from is something of a mess. Phrases like “a highly competitive social market economy” can mean whatever you want it to mean (perhaps a good thing). Mr Sarkozy’s intervention has doubtless made it easier to sell to the French public, but that does not mean such thinking is in any way good for France.

Mr Sarkozy’s opposition to takeovers and mergers punishes French investors. Such protectionism encourages them to keep hold of French stock when they would generate greater returns by selling poorly performing French firms and investing instead with a global eye. As is always the case, so-called economic patriotism is, in the cold light of day, unpatriotic.