(Updates with details, quotes, background)
BRUSSELS, Feb 11 (Reuters) - European Union leaders will
hold a special summit on March 1 to discuss boosting cooperation
as worries grow that resurgent national protectionism may
undermine the bloc's rules and split it politically.
Czech Prime Minister Mirek Topolanek, whose country holds
the EU's rotating presidency, said the meeting should help patch
up differences among the bloc's 27 countries over national aid
schemes to battle the worst recession in decades.
"My goal is to hold a political debate at the highest level
in order to strengthen EU cooperation in countering the crisis,"
Topolanek told a news conference on Wednesday after meeting
European Commission President Jose Manuel Barroso.
Diplomats say Topolanek called the summit partly in response
to French President Nicolas Sarkozy's suggestions last week that
French car makers should move plants back home from the Czech
Republic. France has since unveiled a car sector aid scheme
aimed at preserving jobs in the country.
"We have to realise that the individual member states have
different approaches to solving this issue. Some member states
call for more protectionism, others call for adherence to
rules," Topolanek said.
The dispute partly reflects an EU divide between the richer,
older members, which can afford spending their way out of
recession, and poorer newcomers from central and eastern Europe
that have insufficient funds for substantial aid.
Topolanek acknowledged differences between himself and other
EU leaders, including Sarkozy, but acknowledged that the noisy
public row between him and the French leader on protectionism
had done harm.
"I will not continue this media exchange with my friend
Sarkozy, which is very damaging for both of us. This exchange
was not necessary, I have learnt a lesson. Next time I will call
him up," the Czech prime minister said.
Topolanek noted that growing issues of debt from bigger
Western countries were crowding out borrowing to smaller states.
"Already we can see small countries entering into problems
with liquidity as the price of their bonds decreases and they
are not able to sell them," he said.
Barroso, whose Commission is tasked with monitoring state
aid and competition in the EU, vowed to fight protectionism,
although he said some industrial aid programmes were needed.
"We have to do a battle against economic nationalism
and internal domestic protectionism," he said.
He reiterated the Commission would scrutinise closely the
French car aid plan, which offers billions of euros in loans in
exchange for not cutting jobs.
Topolanek said the March 1 summit would also focus on
coordinating aid programmes for banks, which are relucant to
lend amid the global financial crisis.
Barroso said another extra summit would be held in May to
discuss ways to preserve jobs.
(Writing by Marcin Grajewski, editing by Dale Hudson)
