EU presses Paris on energy merger

Enel believes its takeover plans have been blocked

The European Commission has written to the French government to express concern at Paris' alleged role in the planned merger of two energy firms.

Paris is accused of orchestrating the merger of French energy firms Suez and Gaz de France to prevent Suez from being bought by Italian firm Enel.

The intervention of the European Commission follows complaints by both Enel and the Italian government.

The French government, which denies any wrongdoing, owns 80% of Gaz de France.

'Long-planned'

In addition to blocking any Enel interest in privately owned Suez, Paris is said to wish to create an energy "national champion" ahead of the planned liberalisation of Europe's energy markets next year.

Gaz de France chief executive Jean-Francois Cirelli insists that the merger between his firm and Suez is completely non-political and has in fact been planned since last June.

But Enel claims that its one-time bid partner for Suez, fellow French firm Veolia, dropped out after pressure from the French government.

The row - which comes amid apparently protectionist activity in other EU states - has raised questions about nations' willingness to respect EU treaty rules on the free movement of capital.

France now has two weeks to respond.