HispanicBusiness

Camped outside the French finance ministry, steelworker Aliyahia Djaffar is red-faced with cold but all fired up in the battle to save two blast furnaces that Indian metals giant ArcelorMittal wants to close.

The fate of the steelworks in the eastern Lorraine rust belt - and hundreds of jobs there, including Djaffar's - will be sealed by Friday midnight, the company's deadline for the French government to find a buyer for the furnaces.

"Mittal wants to sink us, he wants to sink all of Europe!" said Djaffar, referring to magnate Lakshmi Mittal. "But his blackmail won't work in France. We won't be pushed about."

If no buyer is found, the furnaces, which have become a symbol of France's industrial decline, will close and Djaffar and 628 co-workers will face redundancy.

Under pressure to find a solution, France's Socialist government has threatened to temporarily nationalize the entire site, which includes a healthy steel processing business.

Industrial Recovery Minister Arnaud Montebourg told parliament Wednesday he had a potential buyer for the site, who was prepared to invest 400 millions euros (about 520 million dollars), but only if he could acquire the entire operation.

Mittal is refusing to sell the site in its entirety, saying that the sheet metal business is a lynchpin in its French operations and that selling the whole site would threaten the jobs of all its 20,000 workers nationwide.

As the deadline looms, the government's tone has become increasingly hostile.

In a blistering attack that caused outrage in India and sent alarm bells clanging in the business community, Montebourg declared in an interview Monday: "We no longer want ArcelorMittal in France because they didn't respect France."

The firebrand left-winger also accused the company of "lies".

The Mittal family said they were "extremely shocked" by Montebourg's comments.

Some French politicians also winced at the remarks, but there was broad support across the spectrum for his nationalization threat, which President Francois Hollande repeated during a meeting with Lakshmi Mittal on Tuesday.

"I take off my hat to Montebourg," said Djaafar, who was wearing a white construction helmet covered in stickers, one of which read "Full Mittal Racket" - a play on the title of Stanley Kubrik's Vietnam War film Full Metal Jacket.

He and a dozen other workers have been camped outside the finance ministry since Thursday last week to show their support for nationalizing the site.

ArcelorMittal has already closed a plant in eastern France and two furnaces in Belgium since 2006, when Mittal Steel acquired Luxembourg-based Arcelor in a hostile takeover.

The company blames the decline in European demand for steel, which

has fallen around 25 per cent since 2007, but the workers are convinced that French steelmaking has a bright future.

"We make the best steel in the world in Florange. When I see a BMW or an Audi, I say 'that's my steel'!" Jaafar declared proudly.

The outcome of the battle is being closely watched by investors for confirmation of an anti-business slant in France.

The government caused an outcry in the business community this summer by slapping top earners with a 75 per cent tax and lambasting the Peugeot family for job losses at the French carmaker.

Relations between the state and industry thawed somewhat in October when the government announced 20 billion euros in corporate tax credits towards easing the cost of labour.

A move to nationalize Florange could set the clock back.

For the Financial Times, France's ranking as Europe's top destination for foreign direct investment is at stake.

"If he (Hollande) resorts to nationalization simply because a company is forced to restructure, he will be posting a big 'Do not invest' sign at the borders," the paper warned in an editorial Monday.

Some in Britain are already rubbing their hands at the prospect.

During a visit to India this week, London Mayor Boris Johnson told a business audience that the "sans-culottes (radical left-wingers) appear to have captured the government in Paris."

Offering a a more favourable business climate in the British capital, he added: "Venez a Londres, mes amis!"