EU OBSERVER 2.3.09
EU leaders paper over divisions on economic crisis
HONOR MAHONY
BRUSSELS - Just hours after the European Commission approved a
French car aid plan, EU leaders on Sunday (1 March) sought to put a
lid on damaging divisions in the bloc on how to deal with the
financial crisis by saying that none of its member states is being
protectionist.
"We agreed that there is no case that we see as protectionist," said
Czech prime minister Mirek Topolanek, who called the informal
gathering of EU leaders to discuss the threat of protectionism..
Downplaying the public spat between Paris and Prague sparked by
French comments against car companies relocating to eastern Europe,
the Czech leader added: "We agreed that this is rather more a media
thing than reality."
The summit had been called on the back of rising fears that internal
market rules would be breached as countries sought to protect
industries, particularly the car sector, from haemorrhaging jobs.
Bullish talk by Mr Sarkozy in the run-up to the summit on his right
to protect industry had led to tension around the EU. But the heat
was taken out of the summit after a u-turn by the French government
relaxing some of the conditions for its €6 billion car industry aid
plan, meaning the European Commission could give its approval to the
plan just ahead of the summit.
Bad word - bad idea
After Sunday's meeting French president Sarkozy told reporters that
protectionism was a "bad word" and a "bad idea."
Polish prime minister Donald Tusk, who chaired a pre-summit gathering
of nine central and eastern European states said: "Everybody without
exception agreed that protectionism is not a cure for the crisis. We
also reached agreement that the EU will jointly try to stabilise
currencies, no matter how many countries are in the eurozone."
European Commission president Jose Manuel Barroso noted that "it was
very clearly stated that the internal market is the engine for
recovery."
There was also a concerted effort to stop talk of an east-west divide
as richer member states look to spend their way out of the crisis.
Mr Barroso stressed that each country has to be looked at on its own
merits and that the region could not be viewed as a homogenous whole,
while Czech prime minister Topolanek said: "I think it is clear that
the EU is going to leave nobody in the lurch."
No bailout for eastern Europe
However, a push by the new member states to speed up the procedure
for entering the eurozone as a way of helping them cope with the
economic crisis was rejected by other EU member states. A proposal by
Hungary to set up a fund of at least €160 billion for central and
eastern European countries was also turned down.
German chancellor Angela Merkel rejected the need for a one-size-fits-
all bailout, saying the situation in Hungary - which has been hard
hit by the global credit crisis - cannot be directly compared to
other countries in the region.
The final statement of the summit says that protectionism is "no
answer to the current crisis" and has a line saying that support for
"parent banks should not imply any restrictions on the activities of
subsidiaries in the EU host countries." Eastern member states fear
that if parent banks in western countries get into financial trouble
they could withdraw capital from their daughter banks in eastern Europe.
Although diplomats said there was a harmonious atmosphere around the
table, little of substance was agreed.
Business group Eurochambres complained about the results of the
meeting, saying there were no "tangible actions."
"This summit was yet another rather unproductive political showpiece,
bringing no concrete solutions to the dramatic economic situation and
showing a worrying lack of economic co-ordination among member
states. We deeply hope that the spring European Council will do
better in a couple weeks time," said secretary general Arnaldo
Abruzzini.
EU leaders are due to meet for their regular spring meeting on 19-20
March.
Monday, 2 March 2009
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