* Czech PM: unfair subsidies will yield 'grapes of wrath'
* Hungarian PM steps up aid call for eastern nations
* EU says talks advancing with France on auto aid
By Mark John
BRUSSELS, Feb 27 (Reuters) - EU leaders will aim to show voters and world markets on Sunday they can bridge differences hampering action on a financial crisis that has placed the euro under unprecedented strain and provoked social unrest.
The latest in a string of European gatherings before an April G20 summit in London, the three-hour meeting in Brussels is a bid to clear the acrimonious air within the 27-nation bloc, with no new major initiatives seen until later.
Core EU values -- such as a commitment to open markets and solidarity with poorer member states -- risk losing out to pressure on governments to protect their national industries.
"A system of subsidies and illegitimate loans will not bear the much-desired fruit, but rather grapes of wrath," Czech Prime Minister Mirek Topolanek, whose country holds the rotating European Union presidency, wrote in Friday's Financial Times.
The crisis has shone a light on fundamental differences in the economies of those in the 10-year-old euro single currency zone, with countries like Spain and Ireland suffering acutely from the bursting of property bubbles.
With President Barack Obama bracing the U.S. budget for more spending to halt the downturn, leaders such as France's Nicolas Sarkozy have said Europe should ready to follow suit.
"If the United States defends its industry, as it does, they are right. Maybe in Europe we can do the same," he said this week. He also suggested French car makers move plants back from the Czech Republic, prompting fears of protectionism. [ID:nLR889322]
The European Commission, which monitors state aid rules in the EU, hinted it was close to agreeing to some 6 billion euros of state loans to France's car makers. A Commission spokesman said talks were going well and could see results "very soon".
Central and eastern nations are equally determined to push the case on Sunday for more help to their region after the World Bank warned it would be a "human tragedy" to let the crisis re-divide Europe, united by the 1989 fall of the Berlin Wall.
Latvia's government collapsed last week after a wave of protests. Greece, Bulgaria and Lithuania have seen popular anger explode into riots, and Opel car workers staged mass rallies in Germany this week against planned plant closures.
The Polish zloty, Hungarian forint and Czech crown have been hammered by markets. Within the euro zone, the widening interest rate premium that troubled economies like Ireland are forced to pay to raise debt, compared to the largest member Germany, has even led to speculation the currency could split apart.
While EU leaders last year committed to a recovery plan which if fully implemented could amount to 3 percent of the bloc's output over two years, markets have been unimpressed and data this week showed economic morale at record lows.
POLICY TOOLBOX
Chancellor Angela Merkel insisted on Thursday that euro zone nations should maintain solidarity -- the strongest signal that Germany could help weaker members -- but stressed that budgetary discipline should not go out of the window.
"We have shown solidarity and things will stay like that, but this must be on the basis of the commitments that form the foundation of our common currency," she said in Berlin.
Germany and others reject the idea of a eurozone bond to raise funds for crisis-hit members, and a senior official in Berlin said leaders were not expected to discuss it on Sunday. Talks on help to non-euro states are proving just as tough.
Austria and Hungary are pushing an aid plan for emerging European economies and their mostly Western-owned banks, but the scheme -- which would propose a "toolbox" of policy options -- has met resistance from eastern states themselves.
European finance bodies and the World Bank announced plans for up to 24.5 billion euros ($31.05 billion) of financing for central and eastern European banks on Friday, but Czech banks were quick to stress that they did not need such help.
"We have to avoid the creation of an impression that central and eastern Europe is one big black hole... We have to be able to differentiate," Czech Deputy Prime Minister Alexandr Vondra told reporters in Prague this week.
Hungarian Prime Minister Ferenc Gyurcsany, however, stepped up his calls for EU aid to the region, telling Bloomberg in an interview that Budapest was seeking 180 billion euros ($228 billion) of funding for eastern firms and banks.
Diplomats say Hungary and some other eastern Europeans -- due to hold their own meeting just before the summit -- might raise the idea of speeding up procedures for them to join the euro zone, but the calls are expected to be rebuffed. For FACTBOX on separate EU moves to reform financial supervision, please click on [ID:nLR466273] (Additional reporting by Jan Lopatka in Prague, Marcin Grajewski in Brussels, Boris Groendahl in Vienna, and Berlin, Rome and Paris bureaux, editing by Philippa Fletcher)