EUROPEAN UNION leaders yesterday demanded swift measures to shield their manufacturers against the threat of a severe economic recession triggered by the global financial meltdown.
After long and sometimes sharp discussions, the bloc’s 27 leaders also decided to stick to a December deadline to secure a deal on climate change, but promised to take into account the concerns of Poland and other former communist countries.
Wrapping up a two-day summit in Brussels, the leaders said they intended to work with the US and other countries to bring about “a real and complete reform of the international financial system”, based on new standards of transparency, cross-border supervision and crisis management.
European Commission president José Manuel Barroso and president of France Nicolas Sarkozy will hold talks tomorrow with US president George Bush and set out their case for a wholesale redesign of the world’s financial architecture, including broader powers for the International Monetary Fund.
Mr Sarkozy led the call for assistance to European manufacturers, saying: “If we had a co-ordinated response to the financial crisis in Europe, shouldn’t we have a co-ordinated response to the economic crisis in Europe?”
He won enthusiastic support from Silvio Berlusconi, Italy’s premier, who pointed to $25 billion (€18.6 billion) in low-interest loans that Congress has approved for US car-makers. “Since the US is taking massive steps to support its auto companies, it shouldn’t be a scandal if some EU states find it necessary to give support to their own,” Mr Berlusconi said.
European car-makers are asking for €40 billion in loans, partly to match the US package and partly because they anticipate heavy costs in meeting EU fuel emission standards.
In their summit communiqué, the EU leaders called on the European Commission to present proposals by the end of December “to preserve the international competitiveness of European industry”.
The statement reflected the views of France, Germany, Italy and others that emergency measures adopted this week to protect Europe’s financial sector from collapse, though needed, risked leaving manufacturers in the lurch.
An earlier draft of the statement could have been interpreted as a call for a Europe-wide fiscal boost for manufacturing. But the UK insisted on removing a French-inspired phrase that referred to “necessary steps to react to the slowdown in demand”.
David Miliband, Britain’s foreign secretary, highlighted a clause that stressed the need to observe EU state aid rules in developing policies. “I think we’d rather stick to the financial sector,” one UK official said.
German officials suggested Gordon Brown, the UK prime minister, was trying to gain credit for initiatives to tighten global financial regulation that had been proposed by Berlin some years ago but resisted by the UK. This dispute was, however, small compared with the heated exchange on climate change issues. – (Financial Times service)
