Sarkozy urges EU protection, denies protectionism

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STRASBOURG, France, Nov 13 (Reuters) The European Union must protect its farmers and industries better to overcome a crisis of confidence due to the harsh forces of globalisation, French President Nicolas Sarkozy said on Thursday.

In his maiden speech to the European Parliament as head of state, the conservative leader said he was not advocating protectionism, but trying to forestall it.

''The word 'protection' must not be forbidden in European democracy,'' Sarkozy said.

''If we do not want people exasperated with being victims of unfair competition and of dumping to demand a new protectionism, we must be able to debate what could be a true system of community preferences.'' Noting Europe's trading rivals reserved parts of their public tenders for home-grown small firms, and supported their farm sectors, he said: ''We should be able to do as much to protect ourselves as others do.

''Europe does not want protectionism, but it must insist on reciprocity. Europe does not want protectionism but it has the duty to ensure its own energy and food independence.'' Community preference was a doctrine applied at the birth of the EU's Common Agricultural Policy in the 1960s but it has been overtaken by world trade liberalisation. The European Court of Justice ruled in the 1990s it had no basis in EU law.

Sarkozy urged greater efforts to build an independent European defence capability and modernise the Atlantic Alliance. He said France would propose an initiative during its EU presidency in the second half of next year.

He made no mention in the speech of his opposition to Turkey's EU accession bid, saying only that a panel of wise persons he wants the bloc to appoint should help sketch the ''face and contours of tomorrow's Europe''.

HECKLING However, Socialist Group leader Martin Schulz said Sarkozy repeated his rejection of full membership for Ankara on Turkey at a closed-door meeting with parliamentary floor leaders.

Sarkozy said last month's agreement on an EU reform treaty to replace the bloc's defunct constitution, that was defeated in French and Dutch referendums in 2005, had enabled the 27-nation bloc to overcome a longstanding institutional deadlock.

Rebutting hecklers from the far-left and far-right, he defended his decision not to hold another referendum. He said he had an electoral mandate from the French people to ratify this ''less ambitious'' treaty in parliament.

Sarkozy said EU leaders must address public concerns over ''globalisation and the commercialisation of the world'' to overcome a deep crisis of confidence in Europe.

''The institutional issue has been settled. Now we must settle the political issues. They must be raised without fear and debated without taboo,'' he said, urging discussion in areas spanning monetary, tax, trade, industrial and other policies.

''If other countries have a foreign exchange policy, why should Europe not?'' he asked. Without naming the European Central Bank, he said institutions must not mistake independence for ''total irresponsibility''.

Graham Watson, leader of the centre-right Liberals and Democrats group in parliament, told reporters: ''The thing that impressed me least was the total lack of coherence of economic policy in what he said.

''In one breath he would say something that's not protectionist, and in the next breath he would say something that was.'' REUTERS BJR BD2035

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