EU to hold economy summit amid protectionist tension

Business Materials 11 February 2009 20:06 (UTC +04:00)

European Union leaders are to hold emergency talks on March 1 to stem a swelling tide of protectionism that risks undermining the bloc's single market, the Czech EU presidency said Wednesday, dpa reported.

"The situation in many member states is worrying me and I feel we need to give the highest political attention to our common fight against the (economic) crisis," said Czech Prime Minister Mirek Topolanek after a meeting in Brussels with European Commission President Jose Manuel Barroso.

The head of the EU executive said it was vital for heads of state and government to come face to face more often as "these are exceptional times."

The informal summit in Brussels will focus on the need for a common European response to the bloc's worst recession in decades, as well as on ways to get credit flowing again due to the global financial crisis.

It comes amid growing tension between Prague and Paris over calls by French President Nicolas Sarkozy for French carmakers to move their plants in Eastern Europe back to France.

Sarkozy has also ruffled anti-protectionist feathers in Brussels by pushing through a 7.8-billion-euro (10.1-billion-dollar) aid package for Renault and PSA Peugeot Citroen, on condition that the two companies do not move production to other countries and that they only buy parts from French producers.

"Individual member states have different approaches (to the crisis). Some call for more protectionism, others call for adherence to the (EU) rules," Topolanek said.

"The Czech presidency should somehow moderate and lead the discussions," the premier said.

Aside from the French automobile industry controversy, free-market advocates have also expressed alarm over a recent incident in Britain, where thousands of workers protested against plans to bring in labour from Italy and Portugal at an oil refinery in Lindsey.

Given the "tough times" ahead, it is tempting to resort to protectionism and "come out against workers' rights and freedom of movement," Barroso said.

"If one country takes unilateral measures, the others could do it as well, and we would lose Europe's greatest resource - the single market," Barroso warned.

"(We must fight) economic nationalism and domestic protectionism," he said.

Topolanek, whose centre-right government is against state interventionism, said the wrong policies could end up extending the current economic crisis well beyond 2010.

"If we have politicians interfering more than is strictly necessary through protectionism, they may indeed protract the crisis," Topolanek said.

At the same time, Topolanek moved to play down his highly-publicized tiff with "my friend Sarkozy," who held the EU presidency before him.

"I have met Nicolas Sarkozy on many occasions, and on most issues we have either found a consensus or have tried to remove the bone of contention. Of course, it is impossible for European leaders to be in total agreement, it would be naive to expect that," Topolanek said.

In calling the March 1 meeting, Topolanek said leaders would prepare the groundwork for the EU's March 19-20 regular spring council, which is traditionally devoted to economic issues.

In the meantime, the leaders of France, Britain, Germany and Italy are to meet in Berlin to prepare an April G20 summit in London, the first to be attended by new US President Barack Obama.

Topolanek and Barroso also announced a separate unscheduled meeting of EU heads of state and government, to be held in Prague in May. That summit would be specifically devoted to countering the rise in unemployment.