WHEN Emmanuel Macron first started work as a mergers-and-acquisitions banker at Rothschild in Paris in 2008, technicians of the trade were not impressed. “He did not know what EBITDA was,” sniffed a former colleague, according to the Financial Times (it is a measure of company profits). Yet Mr Macron had ideas and made things happen, and four years later persuaded Nestlé to spend $12bn buying Pfizer’s nutrition business.

Now that he is France’s president, Mr Macron is trying to revive the grandest idea of all in European business: creating continental champions capable of taking on American and Chinese firms. It is an ambitious mission that will prove highly frustrating.

Mr Macron laid out his vision at the Sorbonne in Paris in September, promising a “re-foundation of Europe”, and that he would bolster its “industrial and monetary power”. The same day Alstom, a French transport firm, agreed to merge with the transport arm of Siemens, a German rival. The combination will have $18bn of sales, placing it second only to CRRC, a Chinese state-run monster that sells locomotives around the world. Joe Kaeser, Siemens’s boss, spoke of putting “the European idea to work” to create a “European champion”.

That label sounds corny but it used to make bosses tingle with excitement. A wave of intra-European deals followed the creation of the single market and the euro, accounting for 31% of global M&A activity between 2000 and 2005, according to Dealogic, a data provider. Some were orchestrated by governments—for example, the creation of EADS, a plane manufacturer (now Airbus) in 2000. Others were backed by investors—such as Vodafone’s takeover of Mannesmann in the same year, which created a mobile-phone giant. But the common thread was that having a huge home market would give European firms the kind of economies of scale enjoyed by American companies.

Europe’s long crisis, which began when European bond yields spiked in 2010 (and which, hopefully, ended with Mr Macron’s election in May) paralysed this urge to consolidate. Pan-European deals were just 12% of global M&A last year. Worried about the euro’s stability and enticed by faster growth in emerging economies, European companies have invested more elsewhere. Meanwhile, American and Chinese firms have used deals and organic expansion to get even bigger in their domestic markets.

It is bad enough that Europe does not have any technology giants on the scale of an Amazon or Alibaba, but these trends mean that even the region’s bog-standard old-economy firms are relatively small. The median listed European company is 78% as big as the median American one (these figures are for the top 500 firms in each geographical area, and use a blend of profits, book value and market value to measure size, using Bloomberg data). If you exclude Switzerland and Britain, which have lots of large companies and which either are not, or soon will not be, in the European Union (EU), the median EU firm is just 48% of the size of the median American one. Chinese firms have almost caught up: the median company there is 94% as big as the median EU firm and within a couple more years will probably be larger.

Europe has a long tail of journeymen in some industries, including banking, media, defence and carmaking. For example, Peugeot produces one third of the cars that General Motors does. ProSiebenSat, a German broadcaster, has sales that are less than a tenth of Disney’s. Ericsson is less than half the size of Huawei, a Chinese telecoms-equipment firm. Size is not everything. But a lack of scale, and the costs of operating in lots of midsized countries, may help explain corporate Europe’s weak return on equity, which at 9% lags behind America (13%) and China (10%).

With his aim to foster greater scale, Mr Macron should be pushing on an open door. Profits are rising, making managers bolder, and Chinese and American predators are sniffing around, giving a sense of urgency. And over time the EU may try to deepen the single market by harmonising corporate-tax rates and strengthening its banking union. All this will make pan-European deals more likely.

Yet there are two stumbling-blocks. First, prickly national sensitivities. The Alstom-Siemens combination will have a German controlling shareholder but its headquarters in France. Fingers crossed that this fudge works. Elsewhere, European unity appears scarce. A proposed $34bn takeover of Abertis, a Spanish company, by Atlantia, an Italian firm, would create the world’s largest toll-road operator. But a blocking counter-bid has been made by ACS, a Spanish firm, with the tacit backing of Spain’s government. Meanwhile, Vincent Bolloré, a billionaire who controls Vivendi, a French media firm, wants to create a continental powerhouse and has tried to make inroads into Italy, buying stakes in Telecom Italia and Mediaset, a media business controlled by Silvio Berlusconi, a former prime minister. But Mr Bolloré has run into a wall of regulatory and political hostility.

Pleasing the people, and shareholders too

The other stumbling-block is winning over shareholders. Pan-European deals are risky. Of the 100 largest bids, 30 have collapsed, often due to political rows. To justify paying a takeover premium, firms need to cut costs, but this can be hard for political reasons. The union of Finland’s Nokia and France’s Alcatel, two telecoms-equipment firms, backed by Mr Macron when he was finance minister in 2015, has since incurred his wrath by trying to cut jobs in France. Lax antitrust enforcement has let American firms form oligopolies and pass the gains to shareholders, not consumers. But European regulators are, rightly, tougher, so deals that create windfalls for investors are harder to get approved.

Mr Macron’s instinct is correct. European firms have lost their seat at the top table of global business. But if the aspiration of creating a new cohort of European corporate champions is desirable in theory, it is daunting in practice.