EU leaders have second thoughts on bank rescue and green goals
LUCIA KUBOSOVA
15.10.2008 @ 09:29 CET
EUOBSERVER / BRUSSELS - Europe has breathed a sigh of relief after markets reacted positively to its coordinated rescue of the banking sector. But the Brussels summit of EU leaders (15 to 16 October) is expected to see criticism of the strategy, as well as scepticism over ambitious climate change goals in the uncertain economic times.
Back to the family photo - for some EU leaders the fourth time since September at the invitation of French presidency (Photo: Council of the European Union)
Almost completely overshadowed by the financial crisis, the Lisbon treaty part of the summit agenda will boil down to Ireland's report on reasons why the Irish voters rejected the document, with answers on if and when Dublin could repeat the referendum due in December at the earliest.
For several leaders, it is the fourth time in less than two months that they are gathering under the initiative of France - currently holding the EU's six-month rotating presidency - following an extraordinary session on Georgia and two previous gatherings on the financial crisis.
Paris is hoping that the October summit will give a definite, EU-wide stamp of approval to the bank rescue and lay the groundwork for a grand finale at the end of the year - a December summit that would put both climate change and the Lisbon treaty solution on the list of French presidency achievements.
No one-voice-suport for the rescue plan
But leaders will be arriving in Brussels with differing views on all the major issues, and may even try to unpick previous compromises agreed in the EU capital.
One such area is the bloc's response to the financial crisis: the prime ministers and presidents of 15-strong eurozone on Sunday (12 October) agreed a list of measures designed to resume lending between banks by pumping in capital and boosting guarantees for bank debts and private client deposits.
But Miroslav Topolanek, the centre-right prime minister of the Czech Republic - not yet part of the euro area - said he would refuse any moves which would "go over the top" in terms of providing state aid that could boost liquidity in one member state at the expense of the other, CTK agency reported.
Prague is also against any softening of the EU's budgetary discipline due to the credit crisis, already hinted by some large states, such as Germany and France. According to diplomats, Finland and Sweden have voiced similar reservations and could join the Czechs in criticism of the proposed bank rescue scheme.
Green dispute lingers on
Another point of dispute regards Europe's climate change package, based on goals to cut CO2 emissions by 20 percent and boost renewables and energy efficiency by 20 percent, all by 2020.
Until recently, the details of the plan were most loudly criticised by poorer states in central and Eastern Europe but the current problems in the banking sector have sparked doubts elsewhere about footing the bill for green reform.
The French presidency - backed by the European Commission - has been trying to include a strong political confirmation of the EU's climate change commitments and a list of issues on which member states have already reached a compromise in the summit conclusions.
But after endless debates among ambassadors over the past days without agreement on a common text, Paris decided to present the document only as a legally non-binding paper, called "presidency guidelines."
"We discussed it for three hours without moving anywhere although the document only had two pages," one diplomat told EUobserver, adding "So you can imagine how divided we are on this."
France is determined to achieve a deal by the end of this year, while Brussels is warning that any softening of the agreed goals would undermine Europe's credibility as well as the global climate change efforts.
"Climate change does not disappear because of financial crisis," commission president Jose Manuel Barroso said on the eve of the summit.
Briefly on Lisbon, for now
Although the unclear fate of the EU's Lisbon treaty on institutional reform was previously expected to dominate the October summit, it has been overshadowed by the other events.
The Irish government also signalled well in advance that there will be no definite answers on when and how it will try to solve the problem for now - and will rather save them for December.
It is expected that by then, all other member states may have ratified the new treaty which could put the debate in Ireland in a different light, although there are still question marks regarding ratification in the Czech republic, set to chair the EU in early 2009.
According to some diplomats, the French presidency does not want a long discussion among prime ministers and presidents to follow the presentation by Irish leader Brian Cowen.
However, some leaders may try to express concerns over the timing, as it seems increasingly likely that the June elections to the European Parliament will have to be held according to current EU rules. The current rulebook would also force a reduction in the number of commissioners - leaving some countries without a man at Brussels' top table.