By Keith Weir
LONDON (Reuters) - European Union countries need to work more closely together to boost their economies and tighten financial supervision to combat the financial crisis, Foreign Secretary David Miliband said on Monday.
Miliband, echoing comments from Prime Minister Gordon Brown, said a retreat into protectionism in response to the global downturn would be a huge mistake.
"Fragmentation of the single market would have a devastating effect on Britain," he told a meeting on the future of the EU at the London School of Economics.
He described an effective European Commission, which polices trade and industrial policies in the 27-nation bloc, as the best defence against protectionism.
"Now is the time we need new reform to preserve the gains of the past. The truth is that the single market, enlargement and the creation of the euro have made Europe more effective not less," he said.
Britain is preparing to host a summit of the leaders of the G20 group of developed and emerging nations in London next month. The summit will try to map a way out of the financial crisis.
Stronger supervision of financial markets and coordinated stimulus measures to pull economies out of recession are among the measures Britain is promoting.
The summit is seen as a chance for the ruling Labour Party, in power since 1997, to boost its sagging popularity ahead of a general election due by mid-2010. The opposition Conservatives are on course to win the vote by a comfortable margin.
Miliband, seen as a possible future Labour leader, was careful to stick to government policy on Europe and said Britain had been right not to join the single European currency.
Pressed on the issue, he said there had been no change in the British position.
He said closer EU cooperation on energy projects would be especially beneficial.
"As we face rising unemployment, investment in new energy infrastructure -- including energy storage, interconnectors, efficient homes, renewable power and Carbon Capture and Storage -- could be a major source of new jobs," he said.
