BRUSSELS, Mar 15 (AFP): A growing storm over protectionism is increasingly dividing the European Union as finance ministers meeting in Brussels yesterday argued over the role of the state in their economies.
State intervention in a series of recent high-profile corporate deals has deeply divided member countries, leaving the European Commission scrambling to defend the benefits of the EU's common market.
"We need to recall the big benefits of the internal market," Economic and Monetary Affairs Commissioner Joaquin Almunia said as he arrived for the finance ministers' meeting.
"We need to have competitive companies at the global level," he stressed.
But Luxembourg Prime Minister Jean-Claude Juncker warned that open European markets meant little to individual citizens as they look for security from the state in the face of upheavals caused by big corporate deals.
"We must not believe that our compatriots will turn towards Europe when they feel they are threatened by industrial projects that they don't understand," he said late Monday after chairing a meeting of eurozone finance ministers, which featured a "healthy, wise and virtuous" debate about protectionism.
Concerns about protectionism have so far focused on Rome's claims that Paris engineered a merger between state-controlled Gaz de France and the energy group Suez to thwart a rival bid for the latter from Italian energy group Enel.
French Finance Minister Thierry Breton and Italian Economy Minister Giulio Tremonti met Monday to try to ease tensions between Rome and Paris over the GDF-Suez deal but agreed on little other than need for further talks.
News of the merger came only weeks after the European Commission warned that EU gas and electricity markets were already overly concentrated in the hands of a few companies and that consumers were not reaping the benefits of gradual market liberalisation.
However, there are growing concerns that the re-emergence of protectionism among Europeans will not be limited to strategic sectors such as energy.
"What worries us the most is the survival of genuine competition, that goes for the energy sector but for other areas as well," Belgian Finance Minister Didier Reynders said.
"Monopolies or situations of limited competition should not be reintroduced at the European level," he added.
French Finance Minister Thierry Breton sought to defend his government against allegations, which Paris prefers to call "economic patriotism".
"There is a certain modernity" in economic patriotism, he said, stressing that it was a "concept that has sunk in to people's minds very well".
Although the GDF-Suez deal has grabbed the limelight, other recent deals have also stoked concerns about protectionism.
Madrid is currently studying ways of keeping German energy giant E.ON from buying Spanish group Endesa despite warnings from the European Commission.
Meanwhile, France, Luxembourg and Spain are looking at ways of keeping Mittal Steel from acquiring rival Arcelor, a deal they deeply oppose.
Spanish Finance Minister Pedro Solbes insisted that Spain was not giving into the temptation of protectionism.
"Spain is favourable towards the presence of foreign companies in the country," he said.