Rabu, 15 Oktober 2008

Bank crisis to dominate EU talks

From : BBC NEWS 15 October 2008

A multi-billion-euro rescue scheme for Europe's ailing banks is set to dominate an EU summit in Brussels.

The 27-member bloc is expected to rally behind plans agreed on Sunday by officials from the 15-nation eurozone.

Stocks markets have recovered some ground since then, but remain nervous because of worries over a recession in the US and Germany.

Environmental groups are fearful that the economic crisis will derail EU plans to tackle climate change.

Regulatory rethink?

Markets across Europe rallied after eurozone governments last Sunday pledged around $3 trillion (£1.7 trillion) to restore confidence in the banking system.

However, EU leaders have warned that it is too early to declare this crisis over.

"This is and remains work in progress. We see light at the end of the tunnel but we are not yet there," Mr Barroso said.

On Tuesday, recession fears pushed US share prices lower despite a $250bn (£143bn) government bank rescue plan.

Asian and European stock markets also lost ground following two days of dramatic rises, and a report suggested Germany, the EU's biggest economy, was on the verge of recession.

Speaking to reporters on Wednesday ahead of the meeting, UK Prime Minister Gordon Brown said the International Monetary Fund (IMF) should be "rebuilt" to help regulate the world's financial systems.

He also called for the creation of an early warning system for the international economy and for more cross-border supervision of multinational financial companies.

Mr Barroso said earlier that there was a need to rethink regulatory and supervision rules for the financial markets, as well as limits on executive pay.

Eurozone leaders, meeting under the chair of the French, who hold the current presidency, are expected to brief their EU colleagues on their rescue plans.

France, Germany, the Netherlands, Spain and Austria are planning to guarantee bank lending, provide short-term liquidity and partly nationalise some banks, in schemes modelled on the UK's £500bn (640bn-euro) bail-out package.

However, the commission must scrutinising each country's plan to ensure they do not disadvantage other EU member states or violate EU competition laws.

The packed agenda for the two-day talks also includes:

• Leaders are expected to sign an immigration pact, committing their countries to common principles for handling immigrants.

• A decision to revive the failed Lisbon treaty, meant to give the EU more stable institutions in difficult times, is expected to be put on the back-burner until December.

• Talks on a new EU-Russia partnership treaty have been postponed, amid continuing concern about Russia's military presence in Georgia. There are divisions in the EU about when to resume them.

Climate shift

The EU meeting was originally due to focus on climate change.

Italy, Germany and Poland have argued that existing targets for reducing greenhouse gas emissions would impose extra burdens on electricity generators and carmakers, as an economic slowdown looms.

Environment Commissioner Stavros Dimas told the BBC's environment analyst Roger Harrabin that member states should be able to trade away more than half of their responsibilities for cutting greenhouse gas emissions by getting developing countries to install clean technologies on their behalf.

The European Commission originally proposed that member states should be able to trade no more than a third of their responsibilities.

The new proposal is highly controversial and will be resisted by the European Parliament because it has emerged that some of these clean technology projects would have been built anyway - in those cases, there is no carbon saving.

Some member states will also resist any trading over 50% for fear that it will undermine Europe's credibility on climate change, our correspondent says.

And the head of the European Commission, Jose Manuel Barroso, warned that the EU's ambitious plans should not be hijacked by concerns about economic costs.

"Climate change does not disappear because of the financial crisis. Tackling climate change is central to Europe's future prosperity," he said.

If Europe were to give up its leading role on climate change, "there will be less incentives of others to follow", he added.



Bank crisis to dominate EU talks
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