The new EU competition commissioner, Neelie Kroes, has insisted that she is "no pussycat" and revealed a tough stance on competition issues by banning a planned merger
between EDP (Energie De Portugal) and GDP (Gas De Portugal).

EDP, together with the Italian oil and gas company ENI had intended taking over
GDP. It had argued that the creation of the pan–Iberian market
for energy this year would be an effective counter-balance against
any market power wielded by a newly consolidated entity. Kroes,
however, commented that there was little evidence that a single
Portuguese/Spanish energy market would appear "on a short to medium term basis". She also noted that the planned merger would have undermined many of the benefits
to come from a newly liberalised market.

Politically this has caused a storm as the
new European Commission president, Jose Antonio Barroso, had
supported the merger strongly when he was Portuguese prime minister.
The Portuguese economic affairs minister, Alvaro Barreto, has
announced that he will support any court appeal against the European
Commission decision.

This is the first merger which the European
Commission has blocked since 2001. It seems to indicate that
Kroes will not look kindly on any attempts to create "national champions" particularly in the energy markets where liberalisation is kicking in.

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