The UK's chancellor of the exchequer, Gordon Brown, has warned that Europe is putting its competitiveness at risk if it continues to indulge in policies of 'economic patriotism'.

Mr Brown is to address the Confederation of British Industry to stress the need for European business to adapt to the increasingly global nature of commerce, rather than adopting a head in the sand mentality.

His comments will be interpreted as a rebuke to some other EU countries which have recently moved to block several cross-border merger deals, thus hindering the development of the single EU market.

This trend towards ‘economic patriotism’ has been most visible in the energy sector, where French officials have controversially sought to block the purchase of French firm Suez by Italy’s Enel, while in Spain the Madrid government is actively pushing a merger between Gas Natural and Endesa despite a higher rival offer from German titan E.ON.