THIERRY BRETON, the French Finance Minister, insisted yesterday that the €72 billion (£49 billion) tie-up between Gaz de France and Suez, the utility, would be complete by December, despite opposition from unions, Italy and a majority of his Government’s own MPs.
M Breton was speaking after a crucial parliamentary debate on the privatisation of GdF was postponed until September, adding to obstacles in the path of the merger. With analysts giving warning that the approach of the French presidential election, due next spring, will fuel opposition to the privatisation, M Breton had pressed for a Bill before the summer recess. He was overruled by President Chirac, who feared that MPs would vote against it. M Chirac wants to give Dominique de Villepin, his Prime Minister, an additional two months to swing legislators behind him.
With the State’s holding in GdF due to fall from 80 per cent to less than 50 per cent as a result of the deal, the Government needs to pass legislation to privatise the gas supplier. Centre-right MPs are concerned that the issue could “pollute” the presidential election campaign of Nicolas Sarkozy, the Interior Minister.
M Sarkozy pledged when he floated GdF as Finance Minister in 2004 that the State would retain at least 70 per cent of the group and is anxious to avoid accusations of reneging on his promise. “He’s obsessed by that,” one of his supporters told Le Monde yesterday.
Cheuvreux, the French analysts, said in a note: “We consider the risk that the merger might be cancelled is increasing.”
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The plan to form a French energy giant was announced by M de Villepin in February as a way of blocking a bid for Suez by Enel, the Italian group.
The move infuriated the Italian authorities, and yesterday the diplomatic strains remained evident when Romano Prodi, the Italian Prime Minister, said that France had cancelled a ministerial meeting called to resolve the row.