.EU pledges new IMF money but no new stimulus funds
BRUSSELS (AP) - European Union nations have already spent enough to try to boost sluggish demand, the bloc's leaders said Friday, calling instead for better financial regulation to restore market confidence and fix the ailing world economy.
They also raised new red flags against protectionism after French carmaker Renault SA said it was moving jobs out of low-wage Slovenia and into recession-hit France, and urged more funding for the International Monetary Fund to help countries hard hit by the crisis.
Stimulus spending, market confidence, financial regulation and free trade will be key issues at a Group of 20 summit of the world's leading rich and developing economies next month in London.
The plan EU leaders outlined Friday stands in stark contrast to President Barack Obama's heavy stimulus spending and could make for tough negotiations at the April 2 summit on how best to resolve the global economic crisis.
Getting lending flowing again to businesses and households means more rules and oversight for the financial system and a stronger role and more resources for the IMF, the EU leaders said at a summit that ended Friday.
Leaders of the EU's 27 nations insisted it was too soon to inject extra billions of euros (dollars) into their own economies to fight a recession that has sent industrial output diving and the EU's jobless rate soaring.
Europe is doing "all that was necessary to restore growth," EU leaders said in a joint statement.
British Prime Minister Gordon Brown said solving the banking crisis was the biggest task facing the world right now.
"This is a global banking crisis that's spread right across the world," Brown told reporters at the talks in Brussels. "To solve that problem you've got to get countries working together."
His cure for the world economy was restructuring the banking sector to curb corporate bonuses and clamp down on taxes and the shadow banking system that helped create an investment bubble.
At the same time, Brown said the EU must urge all nations to counter plunging world trade by making finance available to exporters and importers and shunning protectionist trade barriers.
The EU's concrete promises were few. Nations backed doubling IMF lending to $500 billion, saying they stood ready to provide some euro75 billion ($100 billion) if needed.
EU leaders also raised an emergency bailout fund for EU members that don't use the euro from euro25 billion to euro50 billion ($67.7 billion) - a move to assure eastern European countries who could face problems balancing their books this year.
The only real money they laid on the table was some euro5 billion ($6.7 billion) in unused EU farm subsidies that they will spend on energy links, green power and broadband Internet instead of returning it to governments.
They repeated their usual call for Europe to stay true to the great economic project of leveling national barriers to create a single market, saying this "was central to making the recession in Europe shorter and less severe."
But that sounded hollow, after France's Renault SA announced Friday it would move excess production from a car plant in Slovenia to a French site and create 400 French jobs in the process.
France was forced under EU pressure to drop a demand that carmakers getting state handouts should bring jobs home from eastern Europe. EU regulators immediately sounded alarm bells about Renault's decision, saying they would "verify" if it was acting legally.
EU leaders delayed a decision until at least July about how much aid they will offer to poor, mostly African nations, to entice them to sign a new global climate change pact at the end of the year. The United Nations, environmental and aid groups say delaying the move threatens efforts to combat global warming.
MyWay
They also raised new red flags against protectionism after French carmaker Renault SA said it was moving jobs out of low-wage Slovenia and into recession-hit France, and urged more funding for the International Monetary Fund to help countries hard hit by the crisis.
Stimulus spending, market confidence, financial regulation and free trade will be key issues at a Group of 20 summit of the world's leading rich and developing economies next month in London.
The plan EU leaders outlined Friday stands in stark contrast to President Barack Obama's heavy stimulus spending and could make for tough negotiations at the April 2 summit on how best to resolve the global economic crisis.
Getting lending flowing again to businesses and households means more rules and oversight for the financial system and a stronger role and more resources for the IMF, the EU leaders said at a summit that ended Friday.
Leaders of the EU's 27 nations insisted it was too soon to inject extra billions of euros (dollars) into their own economies to fight a recession that has sent industrial output diving and the EU's jobless rate soaring.
Europe is doing "all that was necessary to restore growth," EU leaders said in a joint statement.
British Prime Minister Gordon Brown said solving the banking crisis was the biggest task facing the world right now.
"This is a global banking crisis that's spread right across the world," Brown told reporters at the talks in Brussels. "To solve that problem you've got to get countries working together."
His cure for the world economy was restructuring the banking sector to curb corporate bonuses and clamp down on taxes and the shadow banking system that helped create an investment bubble.
At the same time, Brown said the EU must urge all nations to counter plunging world trade by making finance available to exporters and importers and shunning protectionist trade barriers.
The EU's concrete promises were few. Nations backed doubling IMF lending to $500 billion, saying they stood ready to provide some euro75 billion ($100 billion) if needed.
EU leaders also raised an emergency bailout fund for EU members that don't use the euro from euro25 billion to euro50 billion ($67.7 billion) - a move to assure eastern European countries who could face problems balancing their books this year.
The only real money they laid on the table was some euro5 billion ($6.7 billion) in unused EU farm subsidies that they will spend on energy links, green power and broadband Internet instead of returning it to governments.
They repeated their usual call for Europe to stay true to the great economic project of leveling national barriers to create a single market, saying this "was central to making the recession in Europe shorter and less severe."
But that sounded hollow, after France's Renault SA announced Friday it would move excess production from a car plant in Slovenia to a French site and create 400 French jobs in the process.
France was forced under EU pressure to drop a demand that carmakers getting state handouts should bring jobs home from eastern Europe. EU regulators immediately sounded alarm bells about Renault's decision, saying they would "verify" if it was acting legally.
EU leaders delayed a decision until at least July about how much aid they will offer to poor, mostly African nations, to entice them to sign a new global climate change pact at the end of the year. The United Nations, environmental and aid groups say delaying the move threatens efforts to combat global warming.
MyWay
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