EU nations devise a plan to end economic crisis

Article source: Toby Helm -

EU nations devise a plan to end economic crisis

European leaders have come together, in haste, to hold emergency talks with regards to the current financial crisis griping many of Europe’s leading financial institutions; the aim being to revive the financial system that has been brought crumbling to its knees.

The hasty meeting was held in Paris with hosts, President Sarkozy of France and Britain’s Premier Gordon Brown, together with other like minded European Union leaders. The heads of Europe’s four biggest economies, namely Germany, France, the UK and Italy, are of the view that all nations need to come together to help salvage the global economy.

The leaders have organised a G8 summit that will involve leaders of the G8 group of nations, these are: Britain, US, France, Germany, China, Japan, Canada and Russia. There will also be other global powers involved including India, Mexico, South Africa and Brazil.

Nicholas Sarkozy, in his additional capacity as the European Union President stressed that it was high time Governments moved in to restore morality into the financial system that has lost ground and is continuing to deteriorate by the day. He particularly emphasised that what is needed is for all the nations to lay foundations of entrepreneurial capitalism as opposed to speculative capitalism as he put it.

As another measure to help reduce the effect that the credit crunch was and is having on smaller businesses, the big four members of the European Union have devised a plan to bail out falling small businesses by releasing £12 billion of emergency aid. The European Investment Bank said that it would release the funds in gradual amounts over a period of four years.

The British Prime Minister, Gordon Brown called for a united workforce to ensure that the credit crisis is overcome. He concurred with the French President that small businesses needed the European Union’s support to get through the crisis, adding that Britain was in a strong position to lead other nations out of the oil as well as the credit crisis.

Gordon Brown also said that all necessary steps will be taken immediately to protect all solvent banks from collapse due to a lack of liquidity in the European Union. The leaders from the four greatest nations made these pledges, showing their determination to rescue the world from falling economies. The issues at hand will be discussed in detail by Finance Ministers from the 27 European Union countries.

At the same time, Germany maintained its position by disagreeing with the idea of using funds from European Union taxpayer’s money to save falling banks; this came after the French government suggested an equivalent of $700 billion from European nations to help save ailing banking institutions. Germany’s Economy Minister, Michael Glos was sceptical about how far a €300 billion rescue plan would go to restoring the faith that has been lost in the financial system; bearing in mind that any bail out money used would be coming from the taxpayer.

With the looming crisis and national economies faltering one after another, the move by these world leaders is most welcomed; especially with funds being released to help out small businesses as well as financial institutions. But as they all have agreed, it is a worldwide concern and it therefore calls for a united effort by all world nations. These countries must come together and lay down firm financial foundations that will not only bail out the ailing economies but also ensure that such a crisis is avoided in future.