EU leaders vow to fight recession together

EU leaders yesterday met for an urgent meeting in Brussels to discuss the economic crisis and vowed to fight the recession together.

The 27 leaders committed themselves to "putting their vast single market rules at the heart of their recovery plans" and stressed on the "need that the EU's efforts to promote open markets are reflected elsewhere".

Following the meeting, the EU leaders renewed their commitment to respect internal market rules and to avoid protectionism when devising individual plans to bail-out industries and help boost their economies hit by one of the worst economic recessions in the last decades.

Prime Minister Lawrence Gonzi said the commitment to fight the recession in full force while respecting the EU's common rules was very important to Malta as it stood to benefit if the European economy recovered as soon as possible.

This would directly help the Maltese economy to continue to grow at a steady pace as it would mean more investment, more jobs and more tourists with more money to spend.

On the effect the crisis is having on businesses in Malta, Dr Gonzi said: "We are constantly on the lookout to offer our help where needed. Although the government has to act within certain financial parameters, we are doing our utmost to offer tangible help to those industries that are suffering. The recent help we agreed to give Methode is just one example of what we are doing".

The urgent summit was held amid fears that individual member states were implementing measures considered as protectionist, distorting the common rules of the EU's internal market.

A recent case in point was France's stance to grant billions of euros in aid to its car industry so that these would not move their production to other countries.

While the European Commission deemed the French auto package to be free of protectionism, fears lingered that, as the crisis worsens, governments will resort to bailing out their industries at the expense of other countries.

According to a statement issued following yesterday's meeting, EU member states must "make the maximum possible use of the single market as the engine for recovery, to support growth and jobs".

Although Malta is so far not adversely hit by the financial crisis, also because the island's banking system is based on sound and conservative pillars, the country is still being affected by the worldwide economic downturn, particularly in areas related to export-oriented businesses as seen recently at ST Microelectronics, Methode and other manufacturing companies.

Tourism is also expected to suffer from the economic crisis hitting Europe.

The Czech Prime Minister and current president of the EU, Mirek Topolanek said that European solidarity was unthinkable without national responsibility.

He called on the EU member states to show clear and unequivocal unity in the fight against the impacts of the financial crisis and said that protectionism and breaking the rules of fair competition might, in the long run, do more economic and political harm than the crisis itself.

"For confidence in the internal market to be maintained and strengthened, all the member states must respect the rules of the market," he insisted.

Commission President José Manuel Barroso said that the informal summit was sending a clear message that the EU member states would act in concert when implementing the Economic Recovery Plan.

EU leaders are now expected to meet again in Brussels in two weeks' time to take stock of the situation and decide further measures to boost Europe's economy.