Plan for the Recovery of the European Union’s Financial System Worth 2 Trillion Euros

Leaders of the 27 member countries of the European Union will meet on Wednesday for a two-day meeting in Brussels to discuss a common response to the monetary crisis in line with the agreement of 15 eurozone members, which foresees a rescue plan totaling around 2 trillion euros.

Ahead of the meeting, leaders from the European People’s Party (EPP) will also convene, with Croatian Prime Minister Ivo Sanader participating in that meeting. EPP summits are regularly held before each EU summit, where positions are taken on topics on the agenda of the European Council.

The rescue plan for the financial sector, agreed upon on Sunday in Paris at a meeting of leaders from 15 countries, is expected to be accepted at the Union level as well. The fifteen eurozone countries have agreed on a plan to exit the financial crisis that includes guarantees for interbank loans and the possibility of bank recapitalization. The total potential value of the proposed measures reaches around 2 trillion euros, but this amount also includes bank guarantees, which may never be activated.

"I am confident that we will reach an agreement at tomorrow’s meeting. I believe in the reason and sense of responsibility of national governments," said European Commission President Jose Manuel Barroso on Tuesday.
The main factor of the rescue plan is the guarantees for interbank loans, as distrust among banks and their unwillingness to lend money to each other is the main cause of the current monetary crisis, which could spill over into the real sector and cause a recession. The plan also includes a guarantee on deposits of citizens of at least 50,000 euros, and member countries can opt for higher amounts, which many have done.

The summit will also address the climate-energy package being developed by the institutions of the European Union. Barroso emphasized that the financial crisis is not a reason for the EU to abandon its commitments to combat climate change by reducing carbon dioxide emissions, reducing energy consumption, and promoting alternative energy sources."Global warming will not disappear because of the financial crisis," Barroso said.

EU leaders will also hear a report from Irish Prime Minister Brian Cowen on preparations for exiting the crisis that arose after Irish voters rejected the Lisbon Treaty in a referendum. Dublin has already indicated that it will not present any concrete proposals at the summit, which can only be expected at the December meeting. It is anticipated that by then all other countries could complete the ratification process, putting Ireland under greater pressure to call another referendum.

The European Council is also expected to confirm the European Pact on Immigration and Asylum, a declaration in which member countries commit to developing a common policy in these areas. According to the Pact, Europe must limit the number of immigrants and prioritize highly qualified individuals in immigration. Leaders are also expected to discuss the situation in Georgia and relations with Russia and their eastern neighbors. (H)