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Katinka Barysch, the chief economist at the Centre for Economic Reform, said that government efforts to stop companies falling into foreign hands were symptomatic of the economic fear stalking Europe.

“We’ve had several years of slow growth and stubbornly high unemployment and we’re digesting Eastern European enlargement,” she said. “For most people, enlargement and globalisation are part of the same thing — low-cost foreign competition that threatens their social model.”

In many cases the Commission, which is obliged to uphold the single market and which is committed to free trade, has cautioned that the governments are breaking EU law. It has also tried to appease public fears by setting up an EU globalisation adjustment fund, giving €500 million (£345 million) a year to workers who lose their jobs because of global competition.

Mr McCreevy told the French Banking Federation in Paris yesterday: “The winds of protectionism are blowing across Europe.” He told them that the only thing they should fear was a government that tried to shield domestic markets from competition.

France, the only country in Europe where no mainstream party publicly supports the free market, has been leading the backlash against the EU’s “Anglo-Saxon” economics.

Even some of President Chirac’s own supporters seem to be becoming alarmed, however. Françoise Grossetête, vice-president of the European Parliament and a member of M Chirac’s UMP party, said: “France seems to have caught protectionist flu. This is a great leap 50 years backwards to the era of the state shareholder.”

LOOKING AFTER NO 1

ENERGY

Alarmed that Suez, the French energy company, might fall into Italian hands, Paris last month announced plans for state-controlled Gaz de France to acquire the company instead.

In January Spain extended the powers of its energy regulator to prevent E.ON, a German company, from taking over Endesa, Spain’s largest power utility

STEEL

Lakshmi Mittal, the Indian steel magnate, announced plans to take over Arcelor, the pan-European steel company, in January. Luxembourg proposed adding a clause to require the takeover bid to be made in cash. France said it might veto the deal altogether

BANKS

Poland is trying to stop the merger of Pekao and BPH, two of its banks, both of which are foreign owned. UniCredito of Italy acquired Pekao in 1999, and gained control of BPH last year through the takeover of HVB of Germany. Poland is trying to halt UniCredito’s plans to rationalise the branch network and cut the workforce

INDUSTRY

On New Year’s Eve France announced plans for 11 industrial sectors, including gambling, to be “strategic”, requiring government approval of foreign ownership

SERVICES

The EU Services Directive, aimed at creating a free market in the services sector, has been constrained after Western EU nations became concerned that industries such as information technology and banking could be undercut by competition from Eastern Europe