Europe Unified To Fight Global Financial Crisis
RENEE MONTAGNE, host:
Asian stocks fell sharply this morning following yesterday's dramatic declines on Wall Street. Those losses have some analysts wondering whether the actions by the U.S. and European governments have had any impact on the global financial crisis. EU leaders have been meeting in Brussels to work out a united approach to the crisis. NPR's Eleanor Beardsley is there. Good morning, Eleanor.
ELEANOR BEARDSLEY: Good morning, Renee.
MONTAGNE: Now that this summit is wrapping up, do you expect new measures to be taken?
BEARDSLEY: Well, no really new measures, but what they've come here to do is to get all 27 European nations to endorse a very ambitious plan put in place last weekend in Paris by the 15 countries using the euro. Now, that plan went into action on Monday, and what it did basically is it threw about $3 trillion in bank guarantees and funds to get credit moving again. It was announced simultaneously in capitals like, you know, Paris, Berlin, London, Madrid.
There was concern that there might have been some small countries here that didn't want to sign on to it. For example, the Czech Republic said it didn't need it because it had no financial crisis. But in fact, everyone has endorsed the plan unanimously. And last night French President Nicolas Sarkozy, whose country presides over the European Union right now, he came out last night late, and he said Europe had signed on to this plan unanimously. Europe now was speaking with one voice. And here's what he said.
President NICOLAS SARKOZY (France): (French spoken)
BEARDSLEY: He said, we are unanimous in calling for more than emergency measures to address this crisis. We Europeans also call for the making of a new world financial order. Let it be clear, we are adamant, said Sarkozy. Europe will not let this crisis go by without major consequences for the world monetary and finance systems. We must remake capitalism, he said.
MONTAGNE: So will there be an international summit to draw up, as President Sarkozy puts it, a new financial order? And what would that entail?
BEARDSLEY: Yes. Absolutely there will be, Renee. And they're saying before the end of November. Now, Washington was initially opposed to such a summit, but yesterday even the White House put out a joint statement by the G7 countries and Russia calling for a meeting. What they want to do is sort of remake the financial system and the institutions that were put in place after World War II at this Bretton Woods Conference. You know, they're saying that this system doesn't work anymore. All the leaders here are calling for it to be totally remade.
There is a sense that this system was totally dominated by American finance, and this sort of era of what Europeans see as American capitalism gone wild - a capitalism based on speculation and not the real economy - the era of this kind of capitalism is over. They want a new system where it involves everyone. The world coordinates it. There is transparency, you know, good world coordination. And they want the current system to end. And you can be sure that the Europeans are going to have a big imprint on creating any new financial system.
MONTAGNE: And Eleanor, did this economic crisis push everything else off the table with this summit, or did they get to other things?
BEARDSLEY: No. They definitely got to other things. And there were some weighty issues on the agenda. For example, relations with the new emboldened Russia after the crisis in Georgia. You know, Europe is divided on how to deal with Russia now. And another big issue was climate change. And they put out a statement last night that said they will stick to their plans to reduce greenhouse emissions by 20 percent by the year 2020. This is an ambitious plan. It's going to be difficult for industry, especially in light of the financial crisis.
MONTAGNE: Thanks very much.
BEARDSLEY: Thank you.
MONTAGNE: Eleanor Beardsley, speaking to us from Brussels.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.