The European Commission has written to France voicing concerns about a planned merger between Gaz de France and Suez to create a "national champion".
A spokesman said EU Internal Market Commissioner Charlie McCreevy sent a letter to France yesterday because the abrupt withdrawal of French utility Veolia from a joint takeover bid for Suez raised questions about respect for EU treaty rules on the free movement of capital.
There are "indications some of the principles have been violated," he said. The EC has given Paris until March 17th to explain itself.
Italy accuses France of engineering a planned fusion of Gaz de France and Suez in a protectionist move to thwart a potential rival bid from Enel of Italy.