Jacques Chirac rejects as absurd accusations that France is protectionist

French President Jacques Chirac dismissed as "completely absurd" Tuesday suggestions that his country is pursuing protectionist policies, rejecting criticism elsewhere in Europe of a government-backed merger between two French energy firms.

France 's policies have been in the spotlight since the government last month announced plans to merge Suez SA and gas giant Gaz de France shortly after Italy 's Enel indicated it had an interest in Suez .

"I have heard here or there _ notably in the foreign press _ France , as it were, accused of being protectionist," Chirac said after meeting with German Chancellor Angela Merkel. "I would simply like to underline the completely absurd character of this statement."

Chirac did not mention by name the proposed Suez-GdF tie-up. Rome has asked the European Commission to intervene, claiming France broke EU rules on the free movement of capital and nondiscrimination against foreign firms.

However, Chirac insisted, "official figures show that ... we have twice as much foreign investment as in Germany and three times more than in Italy that is simply to say that France is one of the freest countries in the whole of Europe from this point of view."

Merkel deflected a question on whether Chirac had convinced her that France is not protectionist, saying the figures he cited were "an interesting discovery."

"We agreed that we of course need foreign investment, that we also should take advantage of the chances of the European single market and that we see overall that we are strong countries, that we have strong industrial focuses," she told reporters.

Both leaders expressed interest in a possible merger between French and German stock exchanges. Prospects rose Tuesday as Euronext, the owner of the Paris , Amsterdam , Brussels and Lisbon exchanges, said it was seeking new talks with Frankfurt 's Deutsche Boerse AG.

Merkel said that "it could be a field, like many others, in which German-French cooperation could be something of interest" although she stressed that the governments "cannot anticipate the business decision."

" France shares the same feeling," Chirac said. "If this project becomes concrete, it would certainly be interesting."

NYSE Group Inc., the New York Stock Exchange operator, has said it is interested in Europe and has its eye on the continent's three major exchanges.

The dispute over the proposed French energy merger comes amid controversy over other crossborder merger proposals.

The Spanish government is trying to fend off a bid by German utility E.On AG to buy Spanish utility Endesa, favoring instead a national energy champion via a rival bid from Spain 's Gas Natural. The German government has largely stayed out of that dispute, refusing to comment on Madrid 's stance.

Meanwhile, Poland is holding up the takeover of domestic bank BPH by Italy 's UniCredit.

Germany itself is under fire from the European Union for trying to grant telephone company Deutsche Telekom AG's new high-speed VDSL network an exemption from the obligation to grant access to rivals.

Tuesday's gathering of French and German ministers was the first since Merkel took office in November. However, the conservative leader already has held several meetings with Chirac, keeping up close contacts that grew under her predecessor, Gerhard Schroeder.

The two countries, along with Britain , have been at the forefront of efforts to address concerns over Iran 's nuclear intentions.

Chirac said the Europeans cannot make "the slightest concession" to Iran on regulations governing the nonproliferation of nuclear arms.

However, he stressed they do not contest Tehran 's right to civilian nuclear energy and hope an accord "that is acceptable for both parties" can still be reached, reports the AP.


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