EU plans summit amid concern over protectionism

10th February 2009, Comments 0 comments

The EU announced it will meet this month, as leaders fear protectionist, uncoordinated economic stimulus plans.

Brussels -- The European Union announced Monday an extraordinary summit this month on the global economic crisis to coordinate action amid growing concerns about a return to protectionism.

EU Commission President Jose Manuel Barroso, who attended a Eurogroup meeting of euro zone finance ministers, stressed the need to try to resist protectionism.

"For our exports, for our workers, for our jobs, it is better to have a market of almost 500 million people than to have a fragmented, 27 markets," he said.

Eurogroup Chairman Jean-Claude Juncker, arriving for a meeting with his euro zone counterparts, called for better European economic coordination as some countries prepare individual plans to fight the global downturn.

"I'm a bit concerned that member state after member state are arranging their own plans and programs," said Juncker, who is also premier and finance minister of Luxembourg.

In Prague, Czech Prime Minister Mirek Topolanek, whose country holds the EU's rotating presidency, said he expected to convene the "informal summit" in Brussels by the end of the month. A firm date will be set after he sees European Commission President Jose Manuel Barroso on Wednesday.

"The goal of this meeting of heads of state and government will be to examine steps taken up to now within the recovery plan and the efficiency of these steps," Topolanek said.

The extraordinary summit comes after intense pressure from France, which handed the EU presidency baton over to the Czechs on January 1.

Paris made it clear last week that it thought there has been insufficient European coordination on the response to the economic crisis since Prague assumed the bloc's presidency.

In December, EU leaders agreed on a joint 200-billion-euro economic stimulus plan. Nonetheless, since then, national governments have resumed announcing measures aimed just at supporting their own banks or economic growth.

Sarkozy, while seeking to coordinate European action, has also made protecting French industry the central plank of his plans to ride out the global economic slowdown.

On Monday, he announced new state aid of almost 8 billion euros (10.4 billion dollars) for the French car industry in exchange for pledges to keep jobs and assembly lines in France.

Last week the French leader angered Eastern European governments by suggesting that Peugeot should close a plant in the Czech Republic and bring production home to France.

Topolanek said "the final impetus" behind the EU summit was "the latest selective and protectionist steps and statements made, among others, by President Sarkozy."

The EU 27 summit idea was included in a joint letter from Sarkozy and German Chancellor Angela Merkel to Topolanek and Barroso.

They stressed that so far concerted action "has allowed us to prevent a collapse of the financial system. When member states put in place their national measures, it is essential that they follow a coordinated approach to maximize the benefits for the whole of the Union," they said.

Following the Eurogroup meeting, Juncker called for the issue of banks' "toxic assets" in a coordinated fashion to revive lending to households and businesses.

While not suggesting that there was a one-size fits all solution to toxic assets, EU Economic and Monetary Policy Affairs Commissioner Joaquin Almunia said all solutions, such as setting up a state-owned "bad bank" or setting up a state insurance scheme should be based on an equal, independent assessment of the assets' worth.

Juncker also championed part-time working as a way for employers to avoid mass layoffs. Currently, euro zone unemployment is at eight percent.

The informal February summit will pave the way for a formal European Union summit on March 19 to 20, which will be focused on economic issues.

The spring EU summit will, in turn, prepare for a Group of 20 meeting in London on April 2 to discuss the crisis.

All 27 EU finance ministers will hold talks in Brussels Tuesday.

Paul Harrington/AFP/Expatica

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