EU chief warns on protectionism

Mr Barroso is not happy about protectionism in Europe

European Commission President Jose Manuel Barroso has strongly attacked EU member countries who abuse their position in national markets.

Mr Barroso said the EU executive would take action against countries that pursued protectionist policies.

"We do not need any national champions, what we need are world champions based in Europe," he said.

The EU has expressed concern about efforts by national governments to thwart pan-European mergers.

"Economic nationalism will not build tomorrow's Europe. The commission will exercise its powers if companies abuse their dominant positions in the market," said Mr Barroso at the European Parliament.

Economic nationalism

The European Commission recently wrote to the French government following a planned merger between France's privately-run Suez and state-run Gaz de France.

The plan to merge the two French companies followed a bid by Italy's utility company Enel for Suez.

Paris said it aimed to create a "national champion" in advance of Europe's energy markets being liberalised next year.

The Commission will exercise its powers if companies abuse their dominant positions in the market Jose Manuel Barroso

And France is not alone. EU regulators are also taking action against Poland for trying to thwart part of Europe's largest bank merger.

Italian bank Unicredito's 20bn-euro (£11.5bn) takeover of German bank HVB included a planned merger of Polish banks Pekao and BPH.

But the European Commission argues that Poland broke both free market and competition rules by refusing to clear the merger of the two Polish banks.

Next month the EU will present a draft law to open Europe's service sector across the 25 nation area.

Mr Barroso said such a law was "essential" for making the internal markets stronger and ending barriers between countries.