By Laurence Peter
BBC News, Brussels
The Franco-German motor was for decades the driving force behind EU integration, but at this week's Brussels summit French motors raised fears of protectionism pulling the EU apart.
Just as EU leaders were putting the final touches to their summit conclusions, the news broke that Renault was shifting some car production back to the Paris suburbs from Slovenia, creating 400 jobs.
Hastily, Renault and French officials moved to quell speculation that this could amount to protectionism.
French President Nicolas Sarkozy told reporters that Renault's plan only involved creating extra jobs in France and "does not take away one job from our Slovene friends".
European Commission President Jose Manuel Barroso reacted cautiously, saying he believed there had been a "misunderstanding".
But he said the commission would anyway check what Renault was doing, to ensure that it complied with EU competition rules.
Washington rebuffed
Renault and Peugeot Citroen are each getting 3bn euros ($4bn; £2.8bn) in French state loans, having given assurances that they will keep French plants open.
"I think we shouldn't fall into the trap of big stimulus packages that are difficult to finance"
In February, President Sarkozy suggested that the help should not go to French-owned plants in Eastern Europe - comments that irritated the Czech Republic, the current holder of the EU presidency.
EU leaders were anxious to present a show of unity ahead of the crucial G20 summit in London on 2 April, devoted to the global economic crisis.
They highlighted their agreement on a package of EU funding for innovative green projects, gas pipeline improvements and broadband internet.
But the sum is a modest 5bn euros ($6.9bn; £4.7bn) - a fraction of the bail-out cash thrown at ailing European banks. And the project list was only finalised after protracted haggling.
Calls from the US government and European trade unions for the EU to inject more fiscal stimulus cash into the economy were rebuffed.
"Have the French been caught with their pants down?"
EU leaders insisted that the existing stimulus - put at about 400bn euros ($543bn; £375bn) - had to be given time to kick in.
"It's a pity there aren't more history lessons in America, because they could have learnt from the Great Depression of the 1930s that putting large amounts of money in the economy actually prolonged the crisis," Czech Prime Minister Mirek Topolanek told the BBC.
"I think we shouldn't fall into the trap of big stimulus packages that are difficult to finance."
Challenges looming
But there was some EU cash on the table: a pledge of 75bn euros ($102bn; £71bn) in loans to the International Monetary Fund (IMF) - as Europe's contribution to doubling the IMF's resources - and a higher ceiling of 50bn euros (£47bn; $68bn) for emergency bail-outs of budgets in non-eurozone EU member states.
Tighter financial regulation will be a major issue at the G20 talks - and France and Germany pushed for EU leaders to prioritise this over any new fiscal stimulus.
The summit conclusions call for a rapid agreement with the European Parliament on new legislation to control credit rating agencies, the solvency of insurance companies, capital requirements for banks and cross-border payments.
The EU says it will make the recent recommendations on financial regulation presented by Jacques de Larosiere, an ex-IMF managing director, "the basis for action".
His report in February called for a new pan-European body to monitor systemic risk in the City of London and other financial centres. It would be chaired by the president of the European Central Bank (ECB).
Another body would co-ordinate the supervision of individual banks and other firms dealing in securities.
The economic crisis is exacerbating the challenges that the EU faces in the coming months.
Among them are action on jobs, amid soaring unemployment across Europe, and redoubling efforts to move to a low-carbon economy, with a global summit on climate change looming in December in Copenhagen.
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