Europe's leaders seek common cause

17th September 2009, Comments 0 comments

Alongside partners including Italy, Poland and Spain, Europe's leading nations are meeting Thursday to determine their platform for next week’s summit in Pittsburgh of the world's biggest industrialised economies.

Brussels -- Europe's leaders gather in Brussels on Thursday for a summit aimed at curbing lavish bank bonuses, but which could all too easily degenerate into protectionist mud-slinging.

Britain's Gordon Brown, France's Nicolas Sarkozy and Germany's Angela Merkel -- in the latter stages of general election campaigning -- are seeking common cause en route to Pittsburgh for a summit of the world's biggest industrialised economies starting on Thursday, September 24.

They found a powerful rallying point this week when United States President Barack Obama demanded a new age of prudence.

"Hear my words: we will not go back to the days of reckless behaviour and unchecked excess ... Those on Wall Street cannot resume taking risks without regard for consequences, and expect that next time, American taxpayers will be there to break their fall."

Alongside partners including Italy, the Netherlands, Poland and Spain, Europe's leading nations have similar stories to sell to voters in their own countries -- albeit the Irish referendum on the EU's reforming Lisbon Treaty on October 2 may yet produce a critical conundrum for all.

Meanwhile, the crucial business of securing agreement on when, how and from where to withdraw first the elixir of state support for the banking props of intertwined national economies remains the number one subject on their agenda.

Get it wrong, according to the EU executive arm's Economic and Monetary Affairs Commissioner Joaquin Almunia, and they "will create protectionist tensions and inefficiencies."

His is a message already echoed by the heads of the Organisation for Economic Co-operation and Development, the World Trade Organisation and the United Nations Conference on Trade and Development.

The "whole purpose" of Thursday's gathering, as expressed by Cecilia Malmstroem, foreign minister of current EU presidency-holder Sweden, is to formulate an easily understood European position for Pittsburgh and a coherent exit strategy from the monetary pit of economic stimulus.

That and bonuses aside, Malmstroem says ministers will also seek progress on reform of the world lender of last resort, the International Monetary Fund, and negotiations over the finance required to wage a global fight against climate change going into United Nations talks in December on a new climate treaty.

Europe's leaders have somehow to wean their respective economies off the morphine offered by complicated debt asset purchases -- quickly enough to avoid inflation having them all for dinner, but not so soon as to throw several more millions of their citizens into unemployment.

They have to do so while slashing vote-winning public spending -- all in the name of a single European market and a continental political ideal which may be very far indeed from many ordinary voters' minds.

Europe's worst recession since World War II may be ending, but threats lurk as much from within as from without.

Sarkozy has repeated his threat to walk out of the last Group of 20 summit in London in April -- over a clampdown on tax havens -- if no progress is achieved on the bonus issue.

But if, over dinner on Thursday evening, nods across the table on the need to slap down the unruly bankers behind taxpayer profligacy may indicate an emerging consensus, it will be one riven with differences on what actually constitutes a slap.

The view of Britain, many months from polls Brown believes he can yet win next May, remains very much at odds with that of the Paris-Berlin axis, or enthusiastic supporters such as the Dutch who have already taken unilateral action.

As London, and the City's, conservative mayor Boris Johnson recently and lucidly pointed out, excessive regulation could even fail in the face of bankers' creativity.

Merkel, meanwhile, digs ever deeper to help Canadian and Russian state-owned buyers for an auto manufacturing company that employs 50,000 people across its territory and which continues to benefit from a car scrappage scheme where others have run out.

The Belgians, unsurprisingly given their ambivalent relationship with Brussels, fear protectionism returning to the ring.

And their argument, with frets over the outcome for Opel and Vauxhall workers extending from Poland to Spain, could yet undermine this special summit called by the EU's Swedish presidency.

Some would say the row over what strings were attached to Berlin's Opel inducements amply illustrates what the EU has done even since the financial crisis first broke -- which is to loudly proclaim unified action in public, only to look after number one as soon as backs are turned.

Roddy Thomson/AFP/Expatica

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