EU/Germany: German chancellor Angela Merkel called for the creation of a true European energy market and an end to national champions at a summit of EU leaders yesterday.
In a signal to states such as Spain and France, which are currently trying to block cross-border energy mergers, Ms Merkel said leaders must accept EU champions.
"For me it is certainly clear, and I think it's clear for most, that as the European Union, we can only have an internal market when electricity flows freely and when we accept European champions and not just think nationally," she said.
Ms Merkel's intervention came as EU leaders debated the merits of a European Commission green paper, which sets a goal of creating a single EU energy market.
The paper was one of several policy ideas discussed yesterday by leaders at the spring European Council, a summit that is designed to boost economic growth and create jobs. Leaders also discussed proposals to reform Europe's labour markets, boost investment in research and development and incentives to help small businesses grow in Europe.
But energy, which has been hugely divisive in recent weeks due to a wave of cross-border mergers that have provoked nationalist responses, dominated discussions.
At the meeting last night French president Jacques Chirac shrugged off recent criticism of France for protecting its market from firms based in other EU states.
"The construction of a Europe of energy cannot be confined to the liberalisation of markets . . . We must do everything to encourage the development of 'European champions', based on solid industrial ambition and not on a purely financial approach," Mr Chirac told other EU leaders at the summit.
Italian prime minister Silvio Berlusconi, who faces an election in early April, did not use the summit to launch an attack on France, which has blocked the Italian energy giant Enel from acquiring the French firm Suez. He said the matter was one for the European Commission and he would not raise the issue of protectionism.
However, divisions remain among EU members over the extent of reform of labour markets required to make Europe more competitive.
Divisions over the services directive - a key piece of legislation that will make it easier for EU firms to operate across national borders - emerged at a meeting of representatives of the social partners, the European Commission and the current EU president, Austria, prior to the start of the European Council proper.
UNICE president Ernest-Antoine Seillière said the lobby group, which represents businesses across Europe, was disappointed with the vote last month in the European Parliament to dilute the original text of the proposed directive.
But he said this was just the first stage in the process of drafting the law and he hoped the commission would draft a directive that distinguished legitimate concerns from irrational fears.
At the European Council, several member states from eastern Europe, such as Poland and Slovakia, are pushing to amend the text of the draft conclusions of the summit on the services directive, to send a signal to the commission to toughen up the text.
"We don't want the EU leaders to state that the European Parliament's compromise is the basis for a final deal," a Polish diplomat said on the fringe of the summit.
However, several member states, such as France and Austria, are opposing this.