European Union leaders have opened a two-day summit in Brussels, focused on boosting economic reform, but the meeting is being clouded by tensions over protectionism.
Plans to forge a joint energy strategy for the EU, caught in the crossfire of Russia's gas price war with Ukraine at the start of the year, are also high on the agenda of the annual two-day EU economic summit.
State intervention in a series of recent corporate deals in the energy sector has fuelled concerns about a rising tide of protectionism harming the EU's internal market.
In particular, Italy is furious with France about the French government's role in encouraging state-controlled Gaz de France to merge with Suez, which was interpreted in Italy as a move aimed at thwarting a rival bid by Italian group Enel.
German energy group E.ON has also run up against fierce government resistance to a hostile bid it has made for Spanish energy group Endesa.
At the same time, the European Commission is deeply concerned that there is not enough competition in the EU's gas and power markets, which are to be fully liberalised by July 2007.
