By BBC News Online's Orla Ryan

It is one rule for UK industry and another for the rest of Europe.

Or so it appeared this week, when German Chancellor Gerhard Schroeder reacted in horror to Vodafone AirTouch's hostile bid for Mannesmann.

The UK press immediately cried foul.

If Germany's BMW can scoop up Rover and Deutsche Telekom buy One2One, then why shouldn't it work the other way round?

In theory, it should. Under European law, a UK company should have as much chance as buying a German company as any other company, German or otherwise.

In practice, double standards currently apply in many European countries. This is in part because the kind of capitalism practised in continental Europe is different to that espoused by the UK.

Cries of hypocrisy

Many governments find it hard to watch one-time national champions slip into foreign ownership.

The sale of Rolls-Royce to VolksWagen embarrassed the UK government as the car company was often seen as an emblem of the country's industrial past.

Since privatisation, many UK companies have been ripe pickings for firms on mainland Europe and in the US. But UK companies who have sought to do business in Europe, which has been slower to introduce privatisation, have found it more difficult.

While French electricity giant EdF now owns London Electricity and the supply side of South West Electricity, its electricity markets are still in effect closed.

Other companies should have been able to sell electricity in the liberalised French markets from 19 February.

The European Commission is now to take France to court, a move sure to be welcomed by energy minister Helen Liddell.

"The French say they believe in the single European market. They must learn to live with the consequences," she said.

Hostility to takeovers

Mr Schroeder says it is hostile takeovers he doesn't like, not the fact that the bidder is from the UK.

But many of his compatriots are just angry that a national champion could be allowed to slip into foreign ownership, even though most of Mannesmann's shareholders are not German.

"Mannesmann in Dusseldorf should not become a branch of a London concern," one party official was quoted as saying.

These emotive reactions contrast with the official UK comment on the Vodafone bid: it was a commercial matter for the two companies.

While in theory both the UK and Germany practice the same brand of socially aware capitalism, what Mr Schroeder wants to protect is the way Germany has done business since the war.

German economic and political culture centres on consensus - unions often have board membership - and, by any standards, this has been a bad week for consensus.

One of the reasons the Vodafone bid shocked Germany was that hostile takeovers are virtually unheard of there.

Many German companies raise money not through issuing new shares, but by bank financing. The absence of a stock exchange culture sometimes leaves them surprised at the rough and tumble of corporate playgrounds in the UK and the US.

The outrage that accompanied the Vodafone bid was equalled only by the horror that greeted news that German banks had failed to bail out Philipp Holzmann, the country's second-largest building company.

Mr Schroeder was also quick to intervene, questioning why the banks couldn't agree a package to help save jobs.

In France, politicians are also quick to step into corporate affairs. French Prime Minister Lionel Jospin criticised car tyre firm Michelin's decision to slash its European workforce by 7,500.

The urge to merge

But like it or not, foreign predators are something that all European companies will have to get used to.

Many traditionally state-owned industries have just opened up to competition. As new entrants eat into their market share, they find that the only way to ensure growth is to look to other countries.

Since the German market opened to competition in 1998, Deutsche Telekom's share of the domestic market has fallen from 100% to 70%. This has prompted chief executive Ron Sommer to seek overseas partners to help them recoup their losses.

The single currency has also made it easier to do business across Europe. Many domestic corporates will find other companies want to do business in their market.

Also, companies are more likely to go on the prowl because it is easier to borrow the cash to do so. The advent of the euro means that investors in the eurozone can lend money to companies without any currency risk.