The siren call of economic patriotism
Many continental members of the European Union are turning defensive against each other, not just the outside world. Signs of this have already surfaced in the Italian and Polish governments' attempts to thwart foreign bank bids, and in the dilution of legislation to free up the cross-border provision of services. But the protectionist wave is now cresting in the huge energy take-over moves, with Paris forging the all-French Gaz de France-Suez merger to keep Italy's Enel out, just as Madrid still backs Gas Natural's bid for Endesa to exclude Germany's Eon.The excluded are furious. Giulio Tremonti, Italy's economy minister, warned the rush towards protective barriers risks "an August 1914 effect". This is hypocritical hyperbole, and not just because in the banking field Italy was a sinner until the ousting of its protectionist central bank governor. EU states are not mobilising for all-out economic war. But there is a danger that the conduct of some EU states could roll back hard-won achievements in the Union's single market, and sap the market integration that underpins the euro.
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