Czechs blast 'protectionist' comments by Sarkozy

Calling the remarks "incredible", Mr Topolanek said: "I don't want to scaremonger, I will vote in favour of Lisbon, but here is a big country taking decisions on what will affect our lives."

In an unusual step, Prague, which currently holds the EU presidency, also released an official statement on the issue.

"As the Prime Minister of the Czech Republic I do not understand the argument that it is unjustifiable to manufacture cars for the French market in the Czech Republic," said the statement, with presidency countries usually reluctant to pick a fight with single countries, particularly a large member state such as France.

"The attempts to use the financial crisis to introduce such forms of protectionism and protective measures may slow down and threaten the revival of the European economy," it continued.

Prague was reacting to a speech on Thursday (5 February) by Mr Sarkozy in which he suggested that delocalisation of French car companies should be stopped and the companies relocalised. Carmaker PSA Peugeot Citroen has a plant in the Czech Republic.

"If you build a Renault plant in India to sell Renaults to Indians, that's justified, but if you build a factory, without saying the company's name, in the Czech Republic to sell cars in France, that's not justified."

The speech was an attempt by Mr Sarkozy to assure French people, who took to streets in their masses in late January, that he is taking action to protect their livelihoods in the face of the global economic crisis.

He will later today present plans to aid the French car industry, which would include loans worth about €6 billion to car makers Renault and Peugeot Citroen, according to daily Le Figaro.

The French-Czech exchange highlights the tensions felt by governments throughout the EU as the economic recession starts to bite, with capitals starting to snipe at each other.

Irish Prime Minister Brian Cowen recently hit out at European Commission President Jose Manuel Barroso for making comparisons between Iceland – currently in financial meltdown – and Ireland.

Meanwhile, UK Prime Minister Gordon Brown's VAT-reduction proposals for tackling the economic crisis have been derided by France, Germany and the Netherlands.

The Czech situation however is exacerbated by the fact that the country has yet to ratify the Lisbon Treaty, with any moves to move the French company out of the Czech Republic likely to undermine MPs' already fragile support for the document.

The parliament is due to vote on the document on 17 February after already delaying the vote for several weeks.

In addition, Mr Sarkozy who ran the EU in the second half of last year has been a thorn in the side of the Czechs since they took over in January. He went to the Middle East during Israel's bombardment of the Gaza Strip on his own mission while the Czechs, as the EU presidency, were also there.

More recently, he implied that the Czech EU presidency was being too passive in its reaction to the global financial crisis.