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East-West Divide On EU Economy?

  • March 2nd, 2009
  • Posted by EUEditor

merkel-resize.jpgEuropean Heads of Government have reaffirmed their plans for concerted handling of the economic crisis, in the lead-up to the global economic conference – under the G20 – next month.

The EU leaders, at their Brussels summit, (1.3.09), did have to negotiate differences opening up within their own ranks; the German leader, Angela Merkel (picture) at odds with counterparts from Eastern Europe.


A communiqué from the gathering insisted they would persist with the European single market project despite pressure on national governments to attempt protectionist solutions.

The overall plan would include moves for strengthened economic regulation, an early warning system against outbreaks of instability in the financial markets, and a capital reserve fund.

The British Prime Minister, Gordon Brown, will take the proposal to Washington this week, for talks with President Barack Obama, ahead of the Group of 20 nations’ summit in London, on 2.4.09.

He said he was putting forward a “necessary global grand bargain”.


At Brussels, leaders from the Eastern European states caucused before the general gathering, where they demanded special assistance for their economies under pressure from the world down-turn.

Most have been more hard-hit than the West with factories lacking orders, short-falls on debt, and rising unemployment.

The Hungarian Prime Minister, Ferenc Gyurcsany, spoke of the economic divisions erecting a “new Iron Curtain”; pressing for an assistance package for the region, to cost  €180-billion, (A$357.27-billion;, 2.3.09).

While the European Commission is to continue contact with the Eastern states on their special claims, that bid was rejected on Sunday by the Heads of Government.

Chancellor Angela Merkel disputed the idea of the new states in the East acting as an economic zone.

She said the national economies were all different; they were not all in the same situation, and should be considered one-by-one.

President Nicolas Sarkozy of France defended his plan to spend heavily, to assist car-making factories within France’s own borders – putting new, and efficient, French-owned plants in Eastern Europe first in line for being closed down.

He said the move was a response to assistance being given to Europe’s competitors in the industry, in the United States.


BBC News, EU consensus to tackle crisis, 1.3.09., (2.3.09).

Stephen Castle and Steven Erlanger, Emerging crisis threatens the idea of one Europe, International Herald Tribune, Paris, 2.3.09., (2.3.09).

G20, London, Confronting the protectionist threat, 2.3.09., (2.3.09).