EU competition officials are planning to investigate the Irish financial services and energy markets as part of a wider European inquiry into whether competition is working in the sectors in the 25 member states.

While recent studies have pointed to an absence of competition in the Irish banking and energy markets, the competition directorate general of the European Commission said the latest inquiries were needed to boost the Lisbon competitiveness project.

The commission will begin its inquiries with an investigation into the fast-growing payment card market.

Single market commissioner Charlie McCreevy said the sectoral inquiries into retail banking and business insurance would be a "useful complement" to the commission's efforts to tackle barriers to competition within the single market for financial services.

The commission can demand information from companies and trade associations, powers that are similar to those of the domestic Competition Authority, which carried out a wide-ranging study of the bank sector last year.

Last December, the authority said competition was not working well for personal and business customers and criticised the banks' refusal to pass on interest rate cuts to small business.

The energy study will concentrate on the electricity markets in light of concerns raised by consumers and new players about the slow development of wholesale gas and electricity markets and limited consumer choice.

Despite the deregulation of the Irish electricity market several years ago, the State-owned ESB remains by far the dominant group in the sector. New players have also failed to make major inroads into the gas market, dominated by State firm Bord Gáis.