Italian politicians have accused France of neo protectionism and have strongly criticised the proposed merger between two French energy companies, Suez and Gaz de France, announced by the French prime minister, Dominique de Villepin last Saturday. The Italians see the French move as a way to prevent a deal between Suez and the Italian energy company Enel, which had expressed interest in buying Electrabel, a Belgian subsidy of Suez.

If the French merger goes ahead the French government would own 34 per cent of the combined businesses, but it denies that this policy restricts free market competition and claims that it is not against the spirit of European integration. The merger will create the second largest energy holding in Europe after Frances EDF. The two companies involved hope that the merger will be completed by the end of 2006.

The Italian minister for production Claudio Scajola has cancelled a meeting with his French counterpart scheduled for Monday 27 February and has expressed the hope that the European Union commissioner for competition will step in to ensure that France respects the EUs regulations.

French companies have recently made major investments in Italian companies; particularly in the retail food trade, food distribution and in the luxury goods industry.