I attended an informal meeting of the European Council in Brussels on 1 March with other EU leaders.
We discussed the EU’s continued response to the economic downturn and measures that will be part of the agenda for the G20 London summit on 2 April. Leaders agreed on the need for co-ordinated action to meet unprecedented economic times and restore confidence in the global financial markets.
First, EU leaders agreed to improve regulation and supervision of financial institutions. We need new regulatory standards, improved risk management and systems to foresee, prevent and manage crises in the banks and in the markets. There should be no financial market in the world where risks can be run that threaten the very integrity of the global financial system. We will need cross-border supervision of financial institutions.
Secondly, the whole world must agree that protectionism is not the answer to the crisis. EU leaders therefore agreed in Brussels on the need to reject protectionism while continuing to make maximum use of the single market as the vehicle for recovery to support growth and jobs. We agreed that the European Recovery Programme, finalised last December, continued to provide the right framework for EU action to help jobs and growth, and agreed we should assess the implementation of it both at the European and national levels at the spring European Council on 19 and 20 March.
Thirdly, we agreed that the EU must continue to play its part in stimulating the global economy with a co-ordinated fiscal stimulus and European-wide action to keep interest rates low. Europe’s recovery plan must have high skilled, high technology and low carbon priorities at its heart.
Fourthly, we again agreed on the need to deliver urgent and substantial reform of the international financial institutions. We need more resources for the international financial institutions to prevent and deal with financial crises in different countries. We agreed on the need for early warning systems and reform of the World Bank.
On employment, EU leaders agreed on the importance of measures to counter the negative impact the economic crisis was having on employment. I welcome Prime Minister Topolanek’s decision to convene a special European summit in May to focus on concrete measures to address the social and employment impact of the crisis.
We discussed the particular impact of the global financial crisis on central and eastern Europe. We acknowledged the clear differences between member states in the region, but noted the longer-term benefits to those countries of EU integration. We agreed and welcomed the importance of EIB finance to the region and welcomed the recent announcement by the EIB, World Bank, and EBRD of a €25 billion joint initiative to support the banking sectors and businesses in the region. We agreed to keep assistance provided to those countries under review.