March 15, 2002 Posted: 12:20 PM EST (1720 GMT)

A protester is restained during a demonstration

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BARCELONA, Spain -- Spanish riot police broke up a crowd of several hundred anti-globalisation activists during a summit of European Union leaders.

Several protesters, from groups including some from Britain and France, were dragged away by plain-clothes police officers as European leaders on Friday discussed the economy, Zimbabwe and the Mideast.

Eyewitnesses told Reuters news agency that police intervened after a crowd

gathered around Barcelona's Liceu opera house and began setting fire to rubbish bins and smashing windows.

Shopkeepers put up shutters but the trouble dissipated when the crowd was chased down side streets.

EXTRA INFORMATION In-depth: Changing Face of Europe    MORE STORIES • Analysis: Poor progress report for EU  • French rivals pledge unity

Barcelona has prepared for potential trouble from demonstrators or terror strikes by deploying up to 11,000 police and putting jet fighters and anti-aircraft missiles on stand-by.

Tens of thousands of trade unionists had earlier on Thursday taken to the streets in a peaceful demonstration calling for more workers' protection rights.

Meanwhile, talks were stalling among the leaders of the 15-member EU on Friday over efforts to inject some momentum into ambitious economic reform plans first broached two years ago in Lisbon.

The plan attempts to make Europe the most dynamic centre in the world, matching the U.S., by 2010 through the mechanism of liberated markets.

The leaders are set to move onto discussing Zimbabwe's recent elections and whether to extend existing sanctions during dinner on Friday.

Also on the agenda will be the Middle East and Saudi Arabia's peace plan for the region.

For the first time, 13 mainly ex-communist states who hope to eventually join the EU will also take full part in talks at the Barcelona summit.

The EU has to reform its economic practice if it is to compete with the U.S. Sweden, for example, has complained that it costs four times as much for a business to set up in Europe than it does in the United States.

The EU must also open up labour and trade markets to competition.

But CNN's European political editor Robin Oakley said the gap that existed between free-marketeers and social welfare protectionists remains wide.

Leaders, including Italy's Silvio Berlusconi, the UK's Tony Blair and host Spanish Prime Minister Jose Maria Aznar, want a more flexible labour market.

Warships in Barcelona port are part of the extensive security arrangements

But countries such as France and Belgium remain "hooked on the old European social model," he said.

With elections imminent, France and Germany are cautious of potentially unpopular ideas like watering down job security laws or dismantling state monopolies with unionised workforces.

French President Jacques Chirac and his Socialist Prime Minister Lionel Jospin, who face off against each other in a presidential election next month, have made clear they will make only limited concessions to EU demands that France let other firms compete with its state monopoly in electricity supply.

In Germany, Social Democrat Chancellor Gerhard Schroeder said he expected a deal on opening the French electricity market.

"I think we will seek a compromise with France and will certainly find one," he told reporters in Barcelona on Friday.

"What's important is that the direction makes sense."

Denmark's liberal Prime Minister Anders Fogh Rasmussen, whose country takes over leadership of the EU from Spain in July, accused his European partners of dragging their feet when it came to catching up with the Americans.

"There is a growing gap between the EU and the United States both economic and technological," he said.

"If there was a political will this could be a very important summit...There is a bit too much foot-dragging when it comes to the political will to see through reforms in Europe."

Among successes that the EU will be able to celebrate is the signing of a treaty, brokered by foreign policy chief Javier Solana, between Montenegro and federal Yugoslavia to avert a secession that many had feared could spark another Balkan war. (full story)

The presidents of Yugoslavia and Montenegro were to attend part of the summit in Barcelona later on Friday.

Protesters, police clash after EU summit

March 16, 2002 Posted: 5:41 PM EST (2241 GMT)

The protest was held after the end of the summit

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BARCELONA, Spain -- Pockets of anti-globalisation protesters broke windows and clashed with police in Barcelona late Saturday after European Union leaders ended a two-day economic summit.

A largely peaceful march by 250,000 anti-globalisation demonstrators turned violent late Saturday, when groups of protesters threw Molotov cocktails and fired small incendiary devices at police and broke windows of banks and other businesses in downtown Barcelona.

The clashes broke out near the national police headquarters when "small, violent groups tried to provoke" police, and it quickly spread to other locations downtown, a police spokeswoman told CNN. Seven police officers were injured and 38 demonstrators were arrested, she said.

Earlier, demostrators carried banners with slogans such as "Terror U.S.A." and "Against A Capitalist Europe" as they made their way from Plaza de Catalunya down Via Laietana to the city's port area two kilometers (1 mile) away.

MORE STORIES EU summit: Issue of Iraq dodged    VIDEO European Union leaders are discussing ways to make the group's economy more competitive. Robin Oakley reports from Barcelona. Play video (QuickTime, Real or Windows Media)   EXTRA INFORMATION In-depth: Changing Face of Europe    MORE STORIES • Analysis: Poor progress report for EU  • French rivals pledge unity

The march followed efforts by leaders of the 15-member bloc to inject some momentum into ambitious economic reform plans first broached two years ago in Lisbon.

They announced they had clinched a deal on the issue of France's state electricity monopoly and made progress on other matters.

Behind the intense security the main business of the EU summit had been to revive a plan to open up European markets and strip away regulation in areas ranging from transport and energy to job security.

Spain's Prime Minister Jose Maria Aznar said after the summit that the issue of the liberalisation of electricity and gas markets for industrial and other business users had been resolved.

"We have taken a fundamental step today," Aznar said.

France agreed to a partial opening of its energy market that will by 2004 let French businesses, but not domestic consumers, buy their power from private competitors to state-owned Electricite de France.

British Prime Minister Tony Blair called the deal a "limited but solid achievement."

"There is no doubt this is a change of gear for Europe. Momentum for economic

change has been secured," he said.

"I said before this was a `make or break' summit. It was important, that having stalled in Stockholm, that we moved forward and we have moved forward."

French President Jacques Chirac and Prime Minister Lionel Jospin had told their EU partners on Friday they could not go any further on energy liberalisation.

"It is progress, but not quite the progress some member states would have liked," an EU diplomat told Reuters.

Among other items, Aznar said EU leaders reaffirmed their support for the creation of an independent Palestinian state alongside Israel and condemned "terrorism."

Blair said the EU summit also agreed that the re-election of Zimbabwe President Robert Mugabe had not been free and fair.

The EU leaders met amid tight security

Earlier, the heads of government issued a draft communique expressing support for collective action against U.S. steel tariffs through the World Trade Organization (WTO).

EU officials made clear on Friday the bloc would seek compensation for U.S. President George W. Bush's tariffs.

For the first time, 13 mainly ex-communist states who hope to eventually join the EU have also taken full part in talks at the Barcelona summit.

The EU has to reform its economic practice if it is to compete with the U.S. Sweden, for example, has complained that it costs four times as much for a business to set up in Europe than it does in the United States.

The EU must also open up labour and trade markets to competition but CNN's European Political Editor Robin Oakley said the gap that existed between free-marketeers and social welfare protectionists remains wide.