EU 'consensus' to tackle crisis

EU leaders have ended an emergency summit in Brussels saying they are determined to avoid protectionist moves in response to the economic crisis.

"There was consensus on the need to avoid any unilateral protectionist measures," European Commission president Jose Manuel Barroso said.

He spoke after the summit aimed at heading off a new east-west rift.

Hungary earlier called for a 180bn-euro (£160bn) aid package for Central and Eastern Europe - but that was rejected.

Germany's Chancellor Angela Merkel said the former communist countries - the newest EU member states - were not all in the same situation.

'Just and fair Europe'

The summit followed the French president's pledge to help his nation's car industry if jobs were safeguarded in France.

President Nicolas Sarkozy's move raised fears that national protectionism could scupper hopes of recovery within the EU. The Czech Republic, current holder of the EU presidency, condemned his comments.

UK Prime Minister Gordon Brown said "today was the start of a European consensus on all these major issues that are facing the world community", including "no to protectionism".

After chairing the talks on Sunday, Czech Prime Minister Mirek Topolanek said: "We need a Europe without barriers but also a just and fair Europe."

"I think that it was perfectly clear that the European Union isn't going to leave anybody in the lurch," he told a news conference.

But there was no announcement of any new EU aid package for the badly-hit economies of Central and Eastern Europe.

Mr Topolanek also said US President Barack Obama would visit Prague on 5 April.

East-west differences

Hungary's Prime Minister Ferenc Gyurcsany warned earlier against allowing a "new Iron Curtain" to divide the continent.

Many of the newer EU members in Central and Eastern Europe have seen their financial institutions and economies battered by the downturn. 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.

Commission president Barroso said agreement was reached on a framework for dealing with the toxic assets on bank balance sheets that have crippled lending.

He also stressed that the EU was putting substantial funding into Central and Eastern Europe. He said 7bn euros of structural funds would go to the new member states his year, including 2.5bn for Poland.

Another 8.5bn euros from the European Investment Bank would help small and medium-sized firms in the region this year, he said.

The summit, called by the Czech Republic, came just a week after the same EU leaders met to discuss reforming the region's financial system.

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.

Prime Minister Brown - who will become the first European leader to hold talks with President Obama this week - said the G20 talks next month represented an opportunity to agree "a new deal".

"Only by working together will we deliver the EU and international recovery we need."