Tensions rise as Chirac walks out on EU forum

Jacques Chirac, French president, Thursday night stormed out of a European Union summit after a French industrialist began addressing leaders of the bloc in English.

Mr Chirac and two senior French ministers walked out in protest at the decision of Ernest-Antoine Seillière, head of the Unice employers organisation, to make a plea for economic reform in what he called “the language of business”.

Mr Chirac’s boycott re-flected the tensions surrounding the two-day economic summit, which comes against a backdrop of French street protests over labour market reform and claims that Paris is engaged in protectionism of its energy market. The French president was not in the room to hear Mr Seillière urging leaders to “resist national protectionism in order to avoid a negative domino effect”.

He returned after Mr Seillière had finished speaking. Angela Merkel, Germany’s chancellor, on Thursday issued a thinly veiled warning to France and Spain to open their energy markets, as the dispute over protectionism overshadowed the start of the summit.

Ms Merkel said Europe needed continent-wide industrial champions, and that attempts by member states to ringfence their national energy companies made nonsense of the EU’s single market. “We can only have an internal market when electricity flows freely and when we accept European champions and don’t just think nationally,” she said at the start of the meeting.

Ms Merkel’s intervention came as the EU’s 25 heads of government gathered for their first summit since the row over protectionism in the energy sector erupted earlier this month. She is among those continental leaders who believe a European energy policy is impossible unless member states agree to create a single electricity and gas market with cross-border grids and in-dustrial takeovers. She is annoyed with Spain, which is opposing a takeover of Endesa, the Spanish utility, by Eon of Germany.

Meanwhile Silvio Berlusconi, Italy’s prime minister, has accused France of trying to block a takeover by Enel, the Italian utility, of Suez, its Franco-Belgian rival. Paris intervened by merging the state-owned Gaz de France with Suez. Mr Berlusconi said he would not create a row over the issue at the summit and that the matter now rested with the European Commission.

Wolfgang Schüssel, Austria’s chancellor and the summit host, said the word “protectionism” did not come up at last night’s summit dinner, and the endorsement of an EU energy policy represented an historic de-bate.

Leaders agreed to set up a “strategic energy review”, an “energy efficiency action plan” and a “renewable energy road map”, but there were disagreements on some of the more contentious aspects of the strategy.

The proposed energy policy, although supported in principle by member states, is already under strain.

Some capitals oppose a new European energy regulator to promote cross-border energy trading. Some also have doubts about the development of an EU emergency gas reserve. The economic summit comes at a time of concern in some European countries about globalisation.

The proposed French changes on Thursday won the backing of Joaquín Almunia, EU monetary affairs commissioner, who said the measure would help to reduce youth unemployment. “The new contract will help young French people get their first job and prove their worth,” he said.

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