* EU leaders want highest nuclear power safety standards
* European reactors to have stress tests by year-end
* France says will close any plants that fail
BRUSSELS, March 25 (Reuters) - European leaders agreed on Friday to set the "highest standards" of safety for the nuclear industry to guard against events like those unfolding at Japan's stricken Fukushima plant.
They also called for Europe's neighbours to follow suit.
"We need to ensure that the highest nuclear safety standards are respected," European Commission President Jose Manuel Barroso said after a meeting of EU leaders in Brussels.
"We also have decided to put this very high in our priorities when dealing with third countries, namely our neighbours," he told a news briefing after the summit, which was dominated by Europe's economic crisis and events in Libya.
The EU leaders agreed to put Europe's reactors through a series of "stress tests" by the end of this year to evaluate their resilience to crises.
And France sought to set an example by saying it would close any reactors that failed.
"All the tests will be conducted in France, all the results will be published and if the tests are not passed, we will immediately take the consequences, and the only consequence would be closure," French President Nicolas Sarkozy told reporters after the summit meeting.
European governments have reacted swiftly to Japan's nuclear crisis in the wake of its March 11 earthquake and tsunami.
Germany quickly suspended operations at seven ageing nuclear plants; Austria is demanding pan-European stress tests; and Bulgaria has tightened restrictions on its Belene nuclear project near a quake zone.
France, a major exporter of nuclear technology, has tuned its sales pitch to the new political landscape, advocating the safety aspects of its next generation reactors as it competes for business on international markets. [ID:nLDE72M1ZS]
French reactor makers even hope that setting the toughest possible standards might favour their technology over international rivals.
(Additional reporting by Eva Dou and Julien Toyer; Editing by Elizabeth Fullerton)