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3/4/06

Reuters.co.uk: Germany, UK challenge French economic patriotism by Huw Jones

For the full report go to Reuters.co.uk

Germany, UK challenge French economic patriotism by Huw Jones

BRUSSELS (Reuters) - The backlash against France's economic patriotism policy of shielding firms from foreign bidders intensified on Saturday as Britain and Germany warned there was no rolling back of the EU's internal market. Paris has drawn fire on two fronts. The European Commission suspects it of going too far in stage managing the merger of Gaz de France and Suez to create a "national energy champion". The EU executive has given France two weeks to explain the events leading up to the merger amid accusations it was engineered to thwart a bid from Italy's Enel.

The Commission wants to know why French utility Veolia suddenly pulled out of a joint bid with Enel for Suez just before the merger of Gaz de France and Suez was announced. Brussels has also questioned the legality of a French decree listing 11 sectors as "strategic" to shield firms from foreign bidders, saying it appears to break EU rules on the free movement of capital between member states.

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