The leaders of European Union (EU) member countries have convened today to begin a two-day conference ahead of the G20 summit in London on April 2nd. They convene to draw up a united European front for tackling the financial crisis, to be presented to the other members of the Group of 20 developed and developing economies.

The meeting, according to European Commission President Jose Manuel Barroso, is taking place not to formulate new plans but to effectively implement the one proposed at a similar meeting of officials in November 2008, which committed 200 billion euros to the European Economic Recovery Plan. Barroso said that the EU has, in actuality, invested 400 billion euros in addition to automatic stabilizers in the form of employment and healthcare welfare.

The belief of many EU leaders is that further financial stimulus is not the correct path to take, amongst them Czech Prime Minister Mirek Topolanek, whose country currently holds the rotating EU presidency, referring to the idea of using more taxpayers’ money as “deadly”. The fear that many of the opposing countries foster is that further government spending and increase debt will jeopardize any chance of stable economic recovery in the future.

The European Socialists, who were represented at the meeting by leader Poul Nyrup Rasmussen, urge for even more government spending as has been seen in the U.S. recently, with the distribution of 1.2 trillion dollars to boost the economy. There are hopes amongst officials that at the very least, the EU will agree to contribute more to the IMF, in a bid to double its lending capacity to those countries more completely devastated by the recession.

At G20, there is expected to be a sound compromise between financial stimulus and regulatory reform.

 Print This   Email This