Chirac dismisses charges of French protectionism

14th March 2006, Comments 0 comments

BERLIN, March 14, 2006 (AFP) - French President Jacques Chirac dismissed as "absurd" accusations that his country was protectionist after a summit here on Tuesday with German Chancellor Angela Merkel.

BERLIN, March 14, 2006 (AFP) - French President Jacques Chirac dismissed as "absurd" accusations that his country was protectionist after a summit here on Tuesday with German Chancellor Angela Merkel.

The talks had been overshadowed by accusations that France contravened European competition laws by seeking to block a major takeover in the country's energy sector.

The French government allowed the merger of French utility giant Suez and state-owned Gaz de France, thus blocking a potential takeover bid from the Italian Enel group.

But Chirac dismissed the accusations, pointing to France's record in attracting twice as much foreign investment as Germany, and three times as much as Italy.

"I have heard here or there, but mainly in the foreign press, accusations that France is protectionist," Chirac told a joint press conference with Merkel.

"I must stress how absurd this accusation is. France is one of the most open countries in the whole of Europe.

"The figures are official. It (foreign investment in France) is twice as much as in Germany and three times more than in Italy."

Merkel said she had been "surprised" to hear the figures. "I have taken that on board," she said.

In the wake of the Suez/Gaz de France deal, Merkel's chief of staff Thomas de Maizière described France's policy as "contrary to European legislation".

And shortly before Chirac and Merkel spoke in Berlin, German President Horst Koehler attacked protectionism in a speech to the European Parliament in Strasbourg.

"Whoever weakens the common market through protectionism will end up harming themselves," Koehler said.

Though Chirac and Merkel have met before, the talks here were the first formal discussions between their governments since Merkel took power last year.

Chirac also said both countries had reached broad agreement on proposals to reform the European energy market. They planned to present the proposals at an EU summit this month, he said, without giving details.

Turning to the Iran nuclear crisis, Chirac said the so-called EU-3 — France, Germany and Britain — should continue negotiations with the Islamic republic "until a suitable agreement is reached".

"These countries do not question Iran's absolute right to develop nuclear power," Chirac said, adding the troika should "do everything possible to understand the position of Iran".

French Prime Minister Dominique de Villepin was absent from the meeting because he stayed in Paris to handle a growing crisis over the government's new youth jobs contract, which has sparked massive student protests.

Chirac defended Villepin, saying: "I fully support, without reservation, the action taken by the prime minister and the French government" on the contentious policy.

The First Employment Contract (CPE) aims to encourage employers to hire young people by making it possible to fire people under the age of 26 without cause in the first two years.

It has set off mass protests which have threatened to undermine Villepin's hopes for next year's presidential election.

The two governments also signed cooperation deals including one to build a new 23-million-euro rail bridge over the Rhine river between Strasbourg and the German border town of Kehl to carry high-speed trains.

Copyright AFP

Subject: French news

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