France Says 'Coherent' Energy Plan Is Not Protectionist

French Prime Minister Dominique de Villepin insisted on March 1 that the acquisition of French power and services group Suez by Gaz de France made good business sense and dismissed objections that it amounted to protectionism. On Feb. 25 France announced the planned Suez-GDF tie-up in a controversial move widely seen as aimed at thwarting a possible bid by Enel to swallow up Suez.

"There is no question of economic protectionism. The merger is an authentic industrial project between two enterprises, a French-Belgian project that is part of all of Europe's energy independence," said Villepin.

The deal sparked outrage in Italy, which has sought EU intervention, and was criticized by the EU transport commissioner, Jacques Barrot, as economic protectionism that -- while not illegal -- violated the spirit of a European objective to create continent-wide energy groups.

Villepin described the merger as a "coherent industrial project" that will give France one of the world's leading energy and environment groups. "It will be the number one European gas purchaser and the world's leading liquified natural gas operator. The state will maintain strong control of strategic decisions in the new group. It will guarantee public service operations and the security of our energy supply," he added.

Suez gained full control of Belgian group Elecrtabel last year and renamed it Electrafrance. Suez chief executive Gerard Mestrallet meanwhile said any move by Enel after the merger would have to target "two companies and not one, Suez and GDF, and it would also have to attack a project that everyone recognizes has an industrial logic to it".

Copyright Agence France-Presse, 2006

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