Accusations of Protectionism Fly among EU Members

The Czech presidency of the European Union called for an emergency summit on the economic crisis on Monday as a row between Prague and Paris escalated over French plans to help its ailing auto sector.

French media reported that France and Germany were to press for the meeting of the 27-nation bloc, while Czech Prime Minister Mirek Topolanek said comments by French President Nicolas Sarkozy threatened its ratification of the EU's Lisbon Treaty.

Sarkozy, whose government unveiled a rescue package on Monday, enraged the Czechs last week by suggesting that French car companies should locate plants at home rather than in the Czech Republic.

Splits have also emerged among other EU nations on how to halt the descent into recession after last year's credit crunch, with diverging views on what to do with the toxic assets which have drained confidence out of the global financial sector.

The row risks overshadowing a meeting of euro zone and EU finance ministers on Monday and Tuesday at which officials are also to discuss when to start tightening budget policy and their message to forthcoming G7 and G20 meetings on the economy.

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Urging EU leaders to gather for special talks later this month, Prime Minister Mirek Topolanek said Sarkozy's attitude risked casting the 27-nation bloc into a vicious circle of "beggar-thy-neighbour" actions to protect national economies.

"We can come out of (the crisis) more powerful only if we follow the rules, we respect the rules of the internal market," Topolanek told a news conference in Prague.

"The last impulse was the really selective and protectionist steps and statements of, among others, President Sarkozy, that led me to the intention to call this extraordinary council." "It is these kind of statements, made by some European statesmen, that will lead to a higher level of protectionism among individual states, which will absolutely undoubtedly lead to an escalation of similar actions and in the end only extend the crisis," he warned.

"Brutal Protectionism"

In Brussels, a spokesman for EU Commission President Jose Manuel Barroso said he and Topolanek had discussed an emergency meeting as a way of preparing the ground for a long-planned summit on the crisis in Brussels due on March 19-20.

"It would be at this stage a preparatory exchange of views ... and to increase information on how efforts are going in the member states with economic stimulus. It would be a preparatory meeting," the spokesman told a briefing, adding the meeting could take place in late February.

Sarkozy announced a deal on car aid with Renault and Peugeot Citroen Monday. The French state pledged both of the automakers 3 billion euros ($7.7 billion in total) in a 5-year loan at 6 percent interest.

French carmakers employ many thousands of workers in France and jobs and factories are at risk due to a global slowdown that has pulled car sales down sharply.

In Bratislava, Slovak Prime Minister Robert Fico also criticised Sarkozy's remarks about a possible return of French car factories home.

"I do not think this is fortunate behaviour. Europe can handle this crisis (if it is) united, but it cannot handle it individually... Calls for such brutal protectionism are not helping anyone." Slovakia, which hosts a production plant owned by PSA Peugeot Citroen, indicated it could take retaliatory measures if it sees protectionist measures elsewhere.

"If one country starts behaving like this, for example France, then we will send Gaz de France home. We can use the money Gaz de France is getting as a shareholder in (Slovak gas company) SPP," Fico said.

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