OMEN
03-01-2009, 02:31 PM
EU leaders have begun an emergency summit in Brussels aimed at preventing the economic crisis from opening up a new east-west rift.
The summit was called after French President Nicolas Sarkozy promised to bail out France's car industry if it pledged to keep jobs in France.
The French move raised fears that national protectionism could scupper hopes of recovery within the EU.
Leaders of badly-hit East European nations met prior to the summit.
Hungary's Prime Minister Ferenc Gyurcsany warned: "We should not allow that a new Iron Curtain should be set up and divide Europe."
Many of the newer EU members in Central and Eastern Europe have seen their financial institutions and economies battered by the developing recession. They are faced with plunging currencies, factory closures and in some cases social unrest.
Hungary and Latvia especially are facing serious liquidity problems. They are already receiving billions of euros from an EU emergency fund.
They are expected to highlight their concerns about protectionism and call for more help from richer EU nations, the BBC's Oana Lungescu reports from Brussels.
However, officials have played down chances of EU leaders taking any decision on Hungary's call for a 180bn-euro (£160bn) aid package for Central and Eastern Europe.
Alluring euro
Mr Gyurcsany suggested a relaxation of the rules for adopting the euro. But the chairman of the 16-nation eurozone group, Luxembourg Prime Minister Jean-Claude Juncker, said: "I don't think we can change the accession criteria to the euro overnight."
The summit, called by the Czech Prime Minister Mirek Topolanek, whose country holds the rotating EU presidency, is being held just a week after the same EU leaders met to discuss reforming the region's financial system.
Ahead of the latest meeting, France's President Sarkozy denied accusations of protectionism levied at his 3bn-euro bail-out plan, which aims to keep French carmakers manufacturing in France.
However, he said that if the US defended its own industries, perhaps Europe should do the same.
The French move has been criticised by the Central Europeans, who argue that the French bail-out plan should not be implemented at their expense.
Czechs urge solidarity
"We do not want any new dividing lines. We do not want a Europe divided along a North-South or an East-West line," Mr Topolanek said ahead of Sunday's summit.
"Efforts and measures to fight the economic crisis within the EU must respect the principle of solidarity, but they also require that all players show responsibility," Mr Topolanek said.
European Commission President Jose Manuel Barroso also warned that state aid to bail out ailing sectors should not be used to reverse the EU's progress towards competitive cross-border markets.
"The EU needs open world markets now more than ever if part of our recovery is to be export-led," he said.
However, no new decisions are expected in Brussels on Sunday, as EU leaders will be meeting again later this month for a scheduled summit, our correspondent says.
That summit is part of the build-up to a G20 meeting of world leaders which UK Prime Minister Gordon Brown will host in London on 2 April.
In a letter to the EU leaders, Mr Brown echoed the call to work together: "We face the threat of a retreat into protectionism," he said.
Mr Brown, who travels to Washington this week, where he will become the first European leader to meet US President Barack Obama, said the upcoming G20 talks represented an opportunity to agree "a new deal".
"Only by working together will we deliver the EU and international recovery we need."
BBC
The summit was called after French President Nicolas Sarkozy promised to bail out France's car industry if it pledged to keep jobs in France.
The French move raised fears that national protectionism could scupper hopes of recovery within the EU.
Leaders of badly-hit East European nations met prior to the summit.
Hungary's Prime Minister Ferenc Gyurcsany warned: "We should not allow that a new Iron Curtain should be set up and divide Europe."
Many of the newer EU members in Central and Eastern Europe have seen their financial institutions and economies battered by the developing recession. They are faced with plunging currencies, factory closures and in some cases social unrest.
Hungary and Latvia especially are facing serious liquidity problems. They are already receiving billions of euros from an EU emergency fund.
They are expected to highlight their concerns about protectionism and call for more help from richer EU nations, the BBC's Oana Lungescu reports from Brussels.
However, officials have played down chances of EU leaders taking any decision on Hungary's call for a 180bn-euro (£160bn) aid package for Central and Eastern Europe.
Alluring euro
Mr Gyurcsany suggested a relaxation of the rules for adopting the euro. But the chairman of the 16-nation eurozone group, Luxembourg Prime Minister Jean-Claude Juncker, said: "I don't think we can change the accession criteria to the euro overnight."
The summit, called by the Czech Prime Minister Mirek Topolanek, whose country holds the rotating EU presidency, is being held just a week after the same EU leaders met to discuss reforming the region's financial system.
Ahead of the latest meeting, France's President Sarkozy denied accusations of protectionism levied at his 3bn-euro bail-out plan, which aims to keep French carmakers manufacturing in France.
However, he said that if the US defended its own industries, perhaps Europe should do the same.
The French move has been criticised by the Central Europeans, who argue that the French bail-out plan should not be implemented at their expense.
Czechs urge solidarity
"We do not want any new dividing lines. We do not want a Europe divided along a North-South or an East-West line," Mr Topolanek said ahead of Sunday's summit.
"Efforts and measures to fight the economic crisis within the EU must respect the principle of solidarity, but they also require that all players show responsibility," Mr Topolanek said.
European Commission President Jose Manuel Barroso also warned that state aid to bail out ailing sectors should not be used to reverse the EU's progress towards competitive cross-border markets.
"The EU needs open world markets now more than ever if part of our recovery is to be export-led," he said.
However, no new decisions are expected in Brussels on Sunday, as EU leaders will be meeting again later this month for a scheduled summit, our correspondent says.
That summit is part of the build-up to a G20 meeting of world leaders which UK Prime Minister Gordon Brown will host in London on 2 April.
In a letter to the EU leaders, Mr Brown echoed the call to work together: "We face the threat of a retreat into protectionism," he said.
Mr Brown, who travels to Washington this week, where he will become the first European leader to meet US President Barack Obama, said the upcoming G20 talks represented an opportunity to agree "a new deal".
"Only by working together will we deliver the EU and international recovery we need."
BBC