The leftist presidents of Venezuela and Bolivia are resisting calls by European and fellow Latin American leaders to soften their policies on foreign investment, energy and trade.
Venezuela's Hugo Chavez and his new ally Evo Morales of Bolivia, both running countries with increasingly important energy supplies, are dominating an EU-Latin America summit of heads of state and government in the Austrian capital, Vienna.
The talks were supposed to have focused on new trade and investment deals.
Mr Chavez, a combative former paratrooper, condemned the pro-market policies many Latin American countries have adopted in the last 20 years but which have fallen out of favour with many voters for failing to make a big impact on poverty.
'Neoliberalism has begun its decline and has come to an end,' Chavez told reporters.
European Commission President Jose Manuel Barroso declined to talk about specific states but said populism was a threat.
Bolivia and Venezuela have increasingly riled governments on both sides of the Atlantic.
Mr Morales nationalised Bolivia's oil and gas sector on 1 May, and has promised further tough action with foreign investors.
Venezuela has angered the US by allying itself with Cuba's Communist government and worried Europeans too by extending state control further over the oil industry.
The Taoiseach, Bertie Ahern, is among 58 leaders attending the summit, which is being co-chaired by Chancellor Schüssel of Austria, as President of the European Council, and by the President of Mexico, Vincente Fox.
The summit was planned as a chance to take ties between the EU and several regions of Latin America to a new level.
But with several Latin American governments embroiled in disputes, only a deal for the launch of trade, investment and aid talks between the EU and Central American countries is now expected.
