EU needs European champion firms-Frattini

PARIS, Mar 9 (Reuters) EU states should stop fighting each other about takeovers and concentrate on creating European champion companies strong enough to stand up to competition from countries like China, a top EU official said on Thursday.

European Justice Commissioner Franco Frattini also said that France, which provoked Italian anger last week by brokering the merger of Gaz de France and Suez just days after Italy's Enel hinted at a takeover of Suez, must do more to open up its markets.

''It's normal that the single European market defends itself ... against countries like China,'' he told Le Parisien daily newspaper.

''A country should not try to defend itself when a country like Italy, the Netherlands, or Luxembourg tries to create European champions ... That is the wrong path for Europe.'' He said EU economic patriotism was acceptable but not nationalism by individual countries within the union.

''Yes to patriotism but no to nationalism,'' he said.

''Patriotism means taking care of ourselves, in other words Europeans, rather than fighting each other.'' France's policy of economic patriotism, which aims to shield firms from foreign bidders, has drawn fire from the EU.

Italian, German, British and EU officials have all warned that France's stance could threaten the internal market.

''France has opened itself to the market and has taken advantage of it,'' Frattini said.

''It must continue to open itself up. European investments are a plus for the economy.'' The European Commission has given France two weeks to explain the events leading up to the merger amid accusations it was engineered to thwart a bit from Enel.

''We have asked France for some information: we are waiting for the response,'' Frattini said.

''We will be watching closely to see if European law and the principles of the internal market are being respected. If it looks there is something wrong with this takeover, the Commission will act.'' REUTERS PR HS1454