(Repeats story published late on Monday)
* Czech EU presidency calls extra economic crisis summit
* France unveils 6 billion euro car aid package
* EU Commission plans to vet French auto aid plans
By Jan Strupczewski and Jan Lopatka
BRUSSELS/PRAGUE, Feb 9 (Reuters) - The Czech presidency of
the European Union, livid with French "protectionist" comments,
said on Monday it was calling an emergency EU summit to discuss
government responses to the economic crisis.
France, where President Nicolas Sarkozy last week suggested
French carmakers move plants back home from the Czech Republic,
meanwhile unveiled plans to help its ailing auto manufacturers
with 6 billion euros ($7.8 billion) in government loans.
With recession biting, governments in Europe and well beyond
have pledged to keep international trade channels open to avoid
the protectionist mistakes of the Great Depression years, though
fears that such pledges will not be respected are mounting.
Czech Prime Minister Mirek Topolanek said protectionist
comments by Sarkozy drove him to call the summit, for which no
date has been set but may take place this month.
However, it seems France also wants a meeting.
In a letter to Topolanek, dated Feb. 9 and seen by Reuters,
German Chancellor Angela Merkel and Sarkozy said such a special
meeting was needed.
"The restoration of the supply of credit must be our top
priority," Merkel and Sarkozy wrote in the letter to the Czech
EU presidency, a copy of which was obtained by Reuters.
On Monday, Sarkozy announced the signature of deal on car
aid with the chiefs of PSA Peugeot-Citroen and Renault involving
pledges to each of a 3-billion-euro 5-year loan at 6 percent
interest.
PSA <PEUP.PA> and Renault <RENA.PA> said their firms would
not launch job cuts in France this year, while a European
Commission spokesman said the EU's executive body would study
the fine print of the rescue for compliance with EU rules.
Topalanek said Sarkozy's attitude risked casting the
27-nation EU into a vicious circle of "beggar-thy-neighbour"
actions to protect national economies.
"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 (EU
summit)," Topolanek told a news conference in Prague.
"It is these kinds of statements, made by some European
statesmen, that will lead to a higher level of protectionism
among individual states," he warned.
The European Commission said such a meeting could take place
in late February.
TOXIC ASSETS
Governments have committed hundreds of billions of dollars
worldwide to keeping the banking industry afloat after a boom
that turned to bust when the U.S. housing boom did likewise --
turning trillions of mortage debt derivatives into toxic assets
that are now weighing on the balance sheets of banks across the
industrialised world and shrinking lending.
The International Monetary Fund says the economic downturn
that has come hand-in-hand with the financial crisis is likely
to be the worst since World War Two.
The tension shown by Prague overshadowed Monday's meeting of
euro zone finance ministers. EU finance ministers meet on
Tuesday.
Ministers were discussing budget policy and their message to
forthcoming meetings of the G7 and G20 clubs of, respectively,
rich and rich and developing economic powers.
Some of those present said they were conscious of the need
to resist protectionism and ensure Europe responded in synch.
"I am a little bit concerned that day after day member state
after member state are announcing not only their own ideas but
their own plans and programmes," said Luxembourg's Jean-Claude
Juncker, head of the 16-nation Eurogroup of euro currency users.
"All this has to be better coordinated," he told reporters.
French Economy Minister Christine Lagarde defended Paris in
Brussels saying she would tell her colleagues "there is not a
whiff of protectionism, that it's really the aim to focus on
research and development".
Earlier, Slovak Prime Minister Robert Fico criticised
Sarkozy's remarks about a possible return of French car
factories home and said his country, which hosts a plant owned
by PSA Peugeot Citroen, warned of possible retaliatory measures.
"Calls for such brutal protectionism are not helping
anyone," he told reporters in Bratislava.
"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," he added.
(Reporting by Jan Lopatka in Prague and Peter Laca in
Bratislava, Foo Yun Chee; Writing by Mark John and Brian Love)
