By Brian Johnson - 7th March 2006
The OECD’s chief economist Jean-Philippe Cotis has called for a clamp down on the growing level of ‘economic patriotism’ across the EU.
Cotis called on EU governments on Monday to continue in their efforts to open Europe’s markets to competition, including cross-border mergers.
“The idea of having a single market also includes investment, therefore it is desirable that investment circulates freely within the single market,” Cotis told journalists.
Cotis comments come in the wake of a series of high profile takeover cases where claims of national government interference against foreign ownership are being investigated by Brussels.
The European commission is to investigate claims from the Italian energy group Enel that the French government deliberately scuttled its bid for French rival Suez.
Suez recently merged with the state controlled Gaz de France, only days after Enel announced it was looking to launch a takeover bid for Suez.
Meanwhile, EU internal market chief Charlie Mcreevy has called on Spain to clarify new rules adopted last month which would protect Spanish energy group Endesa from a possible takeover by Germany’s Eon.
Cotis said it was important that “we can have investment in Europe from one country to another on the basis of rationality and economic merit.”
The OECD chief also cautioned the European Central Bank against taking hasty action to increase eurozone interest rates.
Cotis urged the bank not to raise interest rates until “unambiguous signs that slack is shrinking and that underlying inflation pressures are mounting”.
ECB president Jean-Claude Trichet was heavily criticised by business leaders earlier this month when he lifted eurozone interest rates from 2.25 to 2.5 per cent, prompted, said Trichet, by rising prices.
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