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Europe

EU Leaders Warn Against Protectionism, Plan Summit

The bloc's 27 states will come together in Brussels on March 1 to try and quell disputes about whether some members are pursuing protectionism. But in these tough economic times, can solidarity trump self-interest?

Renault assembly line

Incentives to French carmakers to keep producing at home have caused a row

The announcement of the informal summit came after a meeting between European Commission President Jose Manuel Barroso and Czech Prime Minister Mirek Topolanek, whose country currently holds the EU's rotating presidency.

The two leaders warned member states not to take an every-man-for-himself approach to the ongoing global economic crisis. They said protectionist measures would worsen the current financial maelstrom and risk unraveling the EU project.

"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 said after the meeting.

Topolanek said attempted individual cures could end up prolonging the collective problem.

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

Free-market advocates have expressed alarm over a recent incident in Britain, where thousands of workers protested against plans to bring in labor 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.

But it may be difficult to convince all the EU states, and particularly France, which has irritated fellow members by encouraging French companies to keep producing in France alone.

Automotive tug of war

Czech Prime Minister and European Union President Mirek Topolanek

Topolanek has been preaching "all for one, one for all"

Earlier this week, French President Nicolas Sarkozy pushed through a 7.8 billion euro ($10.1 billion) aid package for French automakers Renault and Peugeot on the condition that the two companies don't move production to other countries and only buy French-made parts.

That has upset EU member states where labor and production costs are lower than in Western Europe.

The move by France hasn't sat well with other EU countries with large car industries such as Belgium, which is home to a number of plants owned by the General Motors European subsidiary, Opel.

"The rules for competition have to be the same for all the countries of Europe," Belgian Prime Minister Herman Van Rompuy told reporters after a meeting with German Chancellor Angela Merkel in Berlin.

Merkel also made her position clear ahead of the informal summit, saying there had to be "a level playing field."

In Brussels, Topolanek stressed that he had always found Sarkozy to be a cooperative partner, while acknowledging that it was impossible to achieve total consensus in a diverse bloc like the EU.

But the Czech Republic's eurosceptic President Vaclav Klaus went on the record to the Czech news agency CTK as saying he did not expect the summit to yield a solution to the issue of protectionism.

So concrete results may be hard to come by when the block convenes in March.

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