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The European Union capital was host to two economic summits today. The first, of nine central and eastern European leaders, was called by Poland with the aim of building unity among the newer member states to increase their leverage. It was held amid concerns that the more affluent western countries are trying to protect their own interests at the expense of smaller economies.
Those fears peaked last month when French President Nicolas Sarkozy, announcing a bailout plan for the auto industry, also recommended French car-makers close factories in fellow EU member state (and current president) Czech Republic in order to keep French citizens employed. Such a move not only violates the spirit of the single market, but could even break EU law. France has subsequently had to give assurances to EU regulators that it will not restrict competition.
Calling the current situation the biggest challenge for Europe in 20 years, Hungarian Prime Minister Ferenc Gyurcsany warned that "we should not allow a new ‘Iron Curtain’ to set up and divide Europe into two parts."
The meeting of all 27 member states — billed as an emergency economic summit — was designed not just to discuss possible measures to combat the financial crisis, but to dispel the appearance of deep rifts between member states such as that depicted by Gyurcsany.
Czech Prime Minister Mirek Topolanek, in his capacity as current EU president, emerged from the meeting alongside European Commission President Jose Manuel Barroso with the claim that they had achieved both goals.
“I would like to underline the high level of convergence that was achieved during this meeting,” Barroso declared. “In fact, a meeting of minds and a meeting of purpose.”
That was true in the cases of agreeing on new tools for bank supervision and on rejecting the idea of an EU-based bailout for the auto industry. Instead, the leaders decided to leave it to individual governments to make their own decisions on how to help their industries while adhering to the anti-protectionist rules of the EU’s single market. They also agreed, led by Germany, not to create a roughly $240 billion bailout package for central and eastern European economies as had been requested by the Hungarian prime minister.
Topolanek also said the day’s discussions had shown that no member state was taking protectionist measures. That provoked a few incredulous questions in the press room, where everyone was aware of the anger (denouncing "xenophobic, protectionist" rhetoric) with which Topolanek had reacted to Sarkozy’s comments on the Czech auto jobs. Topolanek said the media had made more out of the issue than was warranted.